Google Acquiring Yahoo? A Waste of Google’s Resources
By PJ Louis
MobileIN.com Perspective
Google Acquiring Yahoo? A Waste of Google’s Resources
By PJ Louis
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Carl Icahn has noted that the day before Microsoft(NMS:MSFT) made its bid of $33 per share, Yahoo’s closing share price was $19.18 per share. A 72% premium was offered and turned down. In short an unconscionable and selfish act on the part of Yahoo’s executive team. Yahoo was and still is a distant Number 2 to Google. There was and still is no one else out there to acquire the company. Even though Microsoft has said it will take the alternative path of organic growth, a Yahoo acquisition would be a huge boost for Microsoft’s Internet plans. Talk about Microsoft being the death of Yahoo is simply ridiculous. The fact is Yahoo has been suffering under the crushing weight of Google for so long that the only reason why Wall Street analysts jumped onto the Microsoft Acquisition Bandwagon was because they finally saw an exit strategy for Yahoo. Even the so-called deal with Google has done nothing for Yahoo. This is what you call “smoke and mirrors”. Yahoo is hoping to artificially jack up the value of the company with deal talks and innuendo. None of it has worked for Yahoo. I assume Bostock and Yang thought this was a Game of Chicken. However, it is not. The game is over. Icahn is going to push as hard as he can. Icahn will get what he wants. The company will get sold off and Bostock and Yang will get tossed. As I had predicted in my analysis entitled; Yahoo Tells Icahn to Go Pound Sand, Yahoo management is looking for their deal and to heck with the shareholders. Yahoo’s actions were unconscionable. Yahoo executives are looking for a pay day for themselves. Yahoo has stated that the management had been seeking “perspectives on transaction synergies, and other non-price deal terms”. This is deal speak for: I want to know how I am going to benefit from this deal and will I have a job after the merger. The Yahoo management and board put their needs before the needs of the shareholders. Icahn is playing both sides against the middle. Ain’t nothing wrong with that. As long as Microsoft shareholders believe there is a chance that Ballmer can shorten his Internet timeline by acquiring Yahoo they will encourage Ballmer to speak to Bostock. Furthermore, as long as Yahoo shareholders believe there is a deal out there they will demand Yahoo get back to the table. Yes, both companies need each other. However, Microsoft is in a position of strength and Yahoo I not. We have two very motivated companies and it will take Icahn to make one of them to blink first. Any talk of Google acquiring Yahoo is nonsense. Google does not need Yahoo. If Icahn actually forced Google into talks, Google would not offer as much as Yahoo. Remember Google is already Number 1 and Yahoo is a very distant Number 2. Google shareholders would have the head of Eric E. Schmidt (CEO of Google) if he paid as much as Microsoft offered. Here is a thought. If Google is smart, they should get into discussions with Yahoo just to bait Microsoft and then Google should walk away from the talks. If Google pulled a stunt like that, Yahoo’s stock would crater. Yahoo would be reeling from such a stock price drop, and Microsoft could pick up what is left after the freefall (a broken company). Microsoft will be spending time and money trying to repair the damage. Google could kill two birds with one stone.
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