Yahoo CEO Jerry Yang  (Source: China Herald)
Yahoo CEO Jerry Yang may have fended off Microsoft, but he may face even bigger challenges tomorrow.

The Yahoo/Microsoft saga finally came to a conclusion yesterday when Microsoft CEO Steve Ballmer withdrew his company's offer to purchase Yahoo for $47.5B. Both sides expressed their frustrations with the rocky deal and both CEOs released statements yesterday.

"I still believe even today that our offer remains the only alternative put forward that provides your stockholders full and fair value for their shares," said Ballmer in a statement Saturday evening. "By failing to reach an agreement with us, you and your stockholders have left significant value on the table."

"This process has underscored our unique and valuable strategic position," added Yang. "With the distraction of Microsoft’s unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history so that we can maximize our potential to the benefit of our shareholders, employees, partners and users."

Despite the differing views on the outcome of the failed marriage from the respective CEOs, the fallout is already starting to rain down from the sky -- and most of the negative attention seems to be focused on Yahoo CEO Jerry Yang.

Analysts are already stating that Yahoo's nearly 50 percent stock price surge was inflated solely due to Microsoft's interest in the company -- with Microsoft now parting ways, those gains are almost guaranteed to disappear. That would leave the company valued at roughly $30B instead of Microsoft's offering of $47.5B (taking into account the additional $5B that Microsoft offered which was rejected by Yahoo).

In a statement released yesterday, Yahoo chairman Roy Bostock firmly remarked that the company's reluctance to give in to Microsoft was done in an effort to protect its shareholders. "We remain focused on maximizing shareholder value and pursuing strategic opportunities that position Yahoo! for success and leadership in its markets," said Bostock.

Some analysts, however, don't quite see eye to eye with this assertion by Bostock. "Jerry Yang really needs to put his money where his mouth is. If he really thinks Yahoo is worth $37 [per share], then he needs to step up and buy some shares when they are in the low $20 [range]," said S & P analyst Scott Kessler. "You are going to see a lot of shareholders just throwing in the towel because they are going to realize it's going to take awhile for the stock to get back to where it was Friday."

"I am not even sure if Yahoo cares about its shareholders because they didn't show much regard for shareholders' best interests in this process,” added Darren Chervitz of the Jacob Internet Fund. "There is probably blame to go around on both sides, but I think most of it is in Yang's hands."

Yang and his team will definitely face tough waters ahead following Microsoft’s decision to bail on the offer. Yang expects Yahoo to see revenue growth in the 25 percent range for 2009 and 2010 -- a distant figure from the 12 percent growth for 2007. Should Yang expect to see such enormous growth in the coming years, his company will need more than a relationship with Google to fend off potential lawsuits from its shareholders.

"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook

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