Steve Stands Jerry Up for the Internet Prom

Twitter and tech news sites lit up like a Christmas tree with the news that Microsoft was pulling their bid for Yahoo. Game over. Money's off the table, Jerry.

And while MG Sigler thinks that there will be fallout for Ballmer , I think Ballmer made the right decision, and one I wish he'd done even earlier. Yahoo has spent its time since the bid grasping at straws to try to increase its possible valuation. The deal with Google for search ads may have looked great on paper, but with the DOJ already looking into it, does anyone really think this will be a permanent solution for Yahoo? If U.S. regulators have their concerns, the chances of any Google-Yahoo deal making it past European regulators are probably hovering right around nil.

Ballmer made the right decision. For $44.6 billion, Microsoft can do an awful lot to restructure the company and hire the right people to do it. Taking Yahoo on now would have sandbagged them. Adding weight with a company whose web presence has been flagging would only weigh Microsoft down more in the web space. It also leaves Microsoft free to look for a new dance partner: could AOL be in their sights? Imagine Yahoo's surprise if Microsoft snaps AOL up for less than they offered Jerry and company, taking Yahoo's only other option for a partner that might keep them from the jaws of eventual obscurity.

Jerry Yang would have been better off spending his time since the initial bid trying to work a deal with Ballmer instead of pulling out every trick he could think of to either avoid the deal or drive the price up. When the markets open Monday morning and Yahoo stock drops like a lead balloon, Jerry is going to have an angry bunch of stockholders on his hands. If they were angry enough to file suit before, what will they be like now when there's no deal in sight?

Update: Jerry tries to act tough in his reply . I love all these letters back and forth between them; it's almost like high school again! If I were Jerry, I'd crawl into bed, pull the covers over my head, and stay there until after open on Monday morning. 

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