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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.

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Missed Opportunity
By unbaisedgamer on 5/5/2008 11:52:37 AM , Rating: 5
Yahoo is out of its mind to reject Microsoft's offer.

Microsoft is out of its mind to make the offer to Yahoo in the first place. Does anyone really use Yahoo? Is it really that strong of a competitor to Google? I think not.

Microsoft would do MUCH better investing 40 billion dollars in itself and working on its own Google competitor. If it invests half that you can expect it to bury Yahoo.

RE: Missed Opportunity
By 16nm on 5/5/2008 12:02:24 PM , Rating: 4
It's not so simple as that because Yahoo have a brand going and lots of users are already 'locked in' to their services. Unless Yahoo! have a pretty big turn around, I think Microsoft will be able to pick them up on the cheap.

Microsoft certainly need Yahoo. They've not had much luck building their brand and this is why they want Yahoo's.

RE: Missed Opportunity
By ChristopherO on 5/5/2008 12:18:00 PM , Rating: 5
I feel sorry for the Yahoo employees...

Microsoft set-aside 1.5 billion for retention bonuses... That's 150,000/each for 10,000 people. That's a lot of money. I know that we aren't talking about equal splits, some would get millions, others would get tens of thousands.

However, given that the employees won't see a huge pay day, plus the fact they have a lot of stock options.... Well, they got hosed the worst of anyone in this charade. I feel sorry for them since this could have paid for their kids college education, or early retirement or whatever.

If Yang really believed in his company, he'd spread some money around as an apology, or buy a billion of stock since he apparently feels the company is so undervalued at present.

RE: Missed Opportunity
By Adonlude on 5/5/2008 1:59:22 PM , Rating: 5
I feel sorry for the Yahoo shareholders...

Shareholders just lost a crapload of money becuase of this decission and if Yang doesn't pull something suprisingly floral smelling out of his @$$ in the next few months you can rest assure he will not be CEO much longer.

RE: Missed Opportunity
By ChristopherO on 5/5/2008 2:33:29 PM , Rating: 2
Sure, I also feel sorry for them. I'm wondering how many shareholder lawsuits Yahoo is going to have to deal with.

Also, I'd be quite surprised if they don't try to oust the board themselves and elect individuals who are merger-friendly.

MS would come back to the table if invited, but round 2 wouldn't be worth nearly as much money.

Yang's plan to partner with Google is insane. Basically he would jettison all their in-house technology (and untold billions in acquisitions) to become the largest "franchisee" of the Google ad-system. Pinning all your hopes on one partner is insane.

That also permanently devalues Yahoo as a merger partner since they bring less to the table. Their profits might be up, but if they use Google for that, one might as well just partner with Google directly and leave Yahoo out of the mix.

At least that's my take. I'm sure everyone has their own opinion, but from a purely business sense, I can see absolutely no rational reason for Yahoo to have spurned Microsoft.

RE: Missed Opportunity
By crystal clear on 5/6/2008 10:10:49 AM , Rating: 2
Microsoft set-aside 1.5 billion for retention bonuses...

Well M.$. believes in.....

Experience is a jewel, and it had need be so, for it is often purchased at an infinite rate."


"The best buy by way of management is brains - at any price."

RE: Missed Opportunity
By TerranMagistrate on 5/5/2008 2:10:42 PM , Rating: 2
Maybe Microsoft should hire you since you seem to know more about MS than they themselves do...

RE: Missed Opportunity
By phxfreddy on 5/5/08, Rating: -1
RE: Missed Opportunity
By Etern205 on 5/5/2008 4:02:32 PM , Rating: 2
Isn't Yahoo serch engine powered by "Google"?

RE: Missed Opportunity
By Emily on 5/10/2008 10:06:25 AM , Rating: 2
Yahoo's has been using their own algorithm since for their search engine since ~2004. That's the change that prompted me to switch my home page from Yahoo to Google. I know a lot of people didn't like Yahoo for their 'clutter' even before that, but that did not trouble me much (and I did use some of their other services).

RE: Missed Opportunity
By hiscross on 5/5/08, Rating: -1
"So if you want to save the planet, feel free to drive your Hummer. Just avoid the drive thru line at McDonalds." -- Michael Asher

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