Everything is going to be alright, everything is going to be alright...

The Yahoo and Microsoft saga ended not with a bang, but with a whimper.  After Yahoo boldly rejected Microsoft, the Redmond-based giant over the weekend decided to walk away from its game-changing offer, leaving Yahoo to ponder its hopes as an independent company.  Despite new deals with Google, Yahoo is for the most part back to its old self, for better or worse. 

This is the same Yahoo that cut 1,000 jobs just months ago.  Yahoo management is aware of the concern surrounding its decisions and the fact that more cuts may be in store on the rough road ahead.  Yahoo CEO Jerry Yang sought to address these fears and reassure employees in a corporate blog posted on Sunday May 4.  Responding to those he felt questioned the company and his employees, he argued that recent developments have shown that "those people underestimated the determination of Yahoo!’s incredible people, spirit and culture."

Yang optimistically cites in the post various new services and projects from Yahoo.  Among these is the acquisition of advertiser Maven Networks.  Other developments include the new homepage customization Buzz service, OneSearch 2.0, video on Flickr, and the female-focused news page Shine.  He also mentions the preview of the company's new comprehensive advertising management platform, AMP!, as another major show of promise.

Also cited were the launch of new Yahoo R&D labs in India and Israel.  Yang was also quick to mention the better than expected Q1 financial results.  Yang stated that these initiatives and successes helped his company reject the Microsoft offer for good.  He added, "All of this reinforced our board’s position that Microsoft’s offer undervalued our unique global franchise."

In answering questions of what's to come, Yang hinted that Yahoo will focus on creative new products and social products.  On the future Yang says:

So, what’s next? With Microsoft’s withdrawal, we’ll be better able to focus our energy on growing our industry leadership and maximizing value for stockholders. We’ll continue to execute on our plan — making your Internet experience as personal, relevant, open and social as possible, serving advertisers so well they insist on working with us, and opening up Yahoo! in a way that developers dream of. And, we’ll also continue to pursue strategic opportunities that position us for long-term success.

He acknowledged that his company will be under increased scrutiny in the near future.  Yang also insisted that Yahoo has learned from the experience and will continue to be more focused and intense, as it has the last few months.

Finally, Yang expressed some surprising remorse that a partnership with Microsoft did not work out.  He continued to state the party line that the transaction was not in his shareholder's interests, tying his hands.  "No one is celebrating about the outcome of these past three months… and no one should,” said Yang.

In all, Yang offered up strong words to his employees at Yahoo and to investors.  It should be interesting to see how well he and his company can adhere to the challenging path they have set for themselves.  Few can argue that the past few months Yahoo has been much more focused and competitive, during its attempt to ward of Microsoft and prove its mettle.  The real telling test, though, will be whether they can sustain these efforts, now that the immediate source pressure is removed.

"Well, there may be a reason why they call them 'Mac' trucks! Windows machines will not be trucks." -- Microsoft CEO Steve Ballmer

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