A few well connected reporters said our prediction that Yahoo would make a decision on the Microsoft offer yesterday were off, and that Yahoo would take more time to make it’s move. But it seems that Yahoo did in fact make a decision yesterday. They will reject Microsoft’s offer. A flat and stubborn “No” should be coming on Monday.
This is dramatic stuff. This could be a simple negotiating tactic to try to get Microsoft’s bid up a bit, as many people are speculating. Business Week’s Rob Hof calls it a done deal (as we did last week, but this news makes me hesitate to repeat it). Silicon Alley Insider says it’s basically a polite way to ask for a little more money. Louis Gray agrees.
That may be the case, and there are signals that they are right about this still being a negotiation. The offer “massively undervalues” Yahoo according to an unnamed source. And the board feels that an offer of $40/share is needed to even be considered (this number has been thrown around since February 3).
But it sure does look like Yahoo grew a pair over the last week, and that this “no” may really just be a “no.” Perhaps this ordeal finally jolted Yang out of whatever alternate reality dreamland he was dwelling in. Perhaps the board saw some fire in Yang’s eyes at the meeting yesterday that made them willing to put their personal fortunes on the line and give a collective middle finger to Microsoft (because, yep, they’re going to be sued, and fast, by their stockholders if this deal dies – and the board’s indemnity agreements won’t provide full protection).
Whatever happens, this is great stuff. Yahoo is being bold. It may be a whimper, but it’s a bold whimper. And I’m damned excited to see what happens next.