Steve Ballmer to Yahoo: No, Thank You

I actually thought it was quite predictable. It was way too obvious that Yahoo behaved too aggressive trying to resist the unsolicited acquisition by Microsoft all the way after the software giant offered a generous $37 per share earlier this year. In its attempts to stay independent Yahoo tried just about everything, including even partnership with its main competitor in the web search field - Google.

When Google decided that the advertising deal with Yahoo was not worth the trouble in court and decided not to continue with the deal, it immediately was clear that the only viable option Yahoo had to survive was being finally acquired by Microsoft - in full or at least in part as Microsoft is mostly interested in Yahoo’s search business.

Of course it was amazing watching Yahoo’s Jerry Yang claiming they never even declined the acquisition offer by Microsoft and merely wanted to negotiate a higher price. Obviously, no one was even surprised when Yang stated clearly that they were ready to sell the company to Microsoft yesterday. I myself was wondering how Microsoft’s Steve Ballmer would react. Honestly, I thought that the Redmond giant and its executives were irritated enough by Yahoo’s illogical behavior not to continue with the deal.

I don’t know if it is because of this irritation or because of some pure business reasons but Microsoft has confirmed they are not interested in the deal any more - not after they made an offer, then an offer again. They seem to simply have lost interest for now. Ballmer has said at a business luncheon today in Sidney:

We tried at one point to do a partnership around search … and that didn’t work either, and we moved on and they moved on. We are not interested in going back and re-looking at an acquisition. I don’t know why they would be either, frankly.

Of course Ballmer knows absolutely well why Yahoo is interested in an acquisition this time and these words sound very much like a mockery to me - but I also think it is quite understandable to expect from Microsoft after they’ve been persuading Yahoo for such a long time. Yahoo was not ready to sell when it was quite well off but now that they are in bad need for acquisition because of the gloomy prospects for the company, Microsoft is not interested any more. The only hope the Microsoft CEO leaves to Yahoo is some partnership in search - but that’s about the only thing the internet company can hope for.

But the most intriguing thing will obviously be happening in the markets today. While everyone hoped Yahoo still had a chance to be acquired by Microsoft, Yahoo’s stock has been rising for the last two days with traders hoping to finally get an acquisition announcement. I can’t even imagine how rapidly they will start selling Yahoo when NASDAQ opens today now that they know there is no more chance for an acquisition. Or could that be a game to send Yahoo stock even lower and be able to buy it for a price that the offended Microsoft will be happy with?

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