OK, Jerry, so now what?
Don't you know that Jerry Yang would grab Microsoft's original $31 a share buyout bid if he could turn back the clock. Of course, that ain't about to happen, so mark November 5, 2008 as the start of the Great Countdown until the company's fate gets decided by Microsoft, or some still unknown third party. From this point on, its CEO has run out of options.
Google announced Wednesday that it was backing out of its proposed search ad partnership because it didn't have the stomach for a fight with Uncle Sam's antitrust lawyers. From a Google perspective, that's a perfectly understandable tactical retreat. In the near-term, the deal would have helped Yahoo more than Google anyway. (Yahoo expected the deal would have raised its revenue by $800 million in its first year, adding an additional $250 million to $450 million in incremental operating cash flow.)
It's hard to believe Microsoft won't go after Yahoo again. At a sharply discounted price to its original offer, why wouldn't it? Yahoo still possesses a coveted franchise, but this economy is a world removed from what it was in late winter when Microsoft was hot to do an acquisition. Back then, Yang could plausibly argue to his board and shareholders the logic of holding out for a higher price or negotiating a partnership with Google.
He gambled and lost.
Yang may still object to a Microsoft sale, but with the stock stuck near its all-time lows, Yahoo's shareholders won't care what he thinks. They've been badly hosed by being too patient.