It's been about a day since I first started reading and talking about Microsoft's $44 billion buyout offer for Yahoo (my current employer). And I have to say, it's been quite fascinating so far.
In all the reading I've done and discussions I've had, numerous scenarios have emerged. I don't claim (beyond a gut feel) to know how likely any of them are, but I figured I'd list them here for the sake of discussion. Bear in mind that, while I work at Yahoo, I have no inside info on this and am only posting my thoughts and ideas that I've heard from friends and others on-line. Jerry is probably too busy to answer my email anyway. :-)
Oh, and if you're one of the reporters who has called or emailed, you'll understand that I really can't go on record or talk to you about what's going on at work.
Anyway, here's the list...
- Microsoft actually does buy Yahoo for $31/share (or something in that ballpark). This is the default case in the minds of many people.
- Another large company (or group of companies, possibly including private equity funds) makes a counter offer. This will ultimately only serve to drive the price up. Microsoft will outbid.
- The Yahoo Board of Directors decides to outsource Yahoo's search advertising (and possibly search) business to rival Google. This entails a long-term partnership for a number of years and is sufficient to send Microsoft back to Redmond to continue working on its own search and search advertising business. I imagine this would be a very tough call to make.
- As a variation of #3, Yahoo may look to strengthen its display advertising (graphical ads) business and take some significant share of the DoubeClick acquisition as part of the deal. That makes Google the dominant contextual text advertising company and Yahoo the dominant display/banner and behavioral advertising company.
- The board simply rejects the offer and decides to continue as is. This seems quite unlikely to me. Shareholders will insist that something big happen.
No matter what happens, it's clear that this will likely be going on for quite some time. Corporate events of this magnitude take quite a bit of time to execute. I suspect that the Yahoo board of directors is considering several options that may or may not be included in the list above. Time will tell.
As an amusing side note, yesterday was one of the few days that page views to my blog home page were dramatically higher than to any of my individual posts. Apparently a lot of folks came over here to see if I had anything to say about the news. I didn't quite expect that.
Posted by jzawodn at February 02, 2008 08:24 AM