Yahoo plays rough and bungles it up.

Thank god. When I heard MS was back at the table negotiating with Yahoo my thought was, "why?" Yahoo has been in a complete slump for some time now (I bet they wish they had never helped Google stay afloat) and it's pretty obvious why. Yahoo simply sucks. Their interface is horrendous! It reminds me of how most webpages looked during the Dot Com Boom era when anyone and everyone wanted to have a webpage and 90% of them were confusing layouts with numerous cluttered hotlinks. Google got it right with their app interface. It's clean, easy to use, easy to navigate, and is very intuitive. (take a look at iGoogle and then look at Yahoo's user page)


I don't know who the fuck Yahoo thinks they are, but they're not hot shit. They are more like an overextended Webcrawler. (remember Webcrawler? no? yeah, that's point) Yahoo does have a lot of services, most of which don't seem to work very well. Kind of like what is happening to MySpace. Yahoo has also been rapidly losing money and is becoming more and more unusable with each and every new feature they roll out. Hardly the type of business that can hold out on a buyout.

I can see why Microsofy wants Yahoo. It's much easier to purchase an existing infrastructure than to build a new one. Thing is, MS can and should be patient. If Yahoo wants to play hardball, let them. Playing hardball also means that if they fuck up, they will suffer for it. It seems that suffering is exactly what Yahoo has to look forward to.

Microsoft Corp. has withdrawn its $42.3 billion bid to buy Yahoo Inc., scrapping an attempt to snap up the tarnished Internet icon in hopes of toppling online search and advertising leader Google Inc.

The decision to walk away from the deal came Saturday after last-ditch efforts to negotiate a mutually acceptable sale price proved unsuccessful.

Microsoft was willing to pay $47.5 billion, or $33 per share, up from the bid's previous value of $29.40 per share, according to a letter from Microsoft Chief Executive Steve Ballmer to Yahoo Chief Executive Jerry Yang.

But Yahoo demanded at least $53 billion, or $37 per share, according to Ballmer. That would have been nearly double Yahoo's stock price of $19.18 at the time Microsoft first made its bid a little over three months ago.

So, Yahoo got greedy and wanted a sweet severance package. Who can blame them? The problem is that Yahoo was unreasonable. Now that MS has balked at the deal, I imagine they won't be very likely to rekindle it anytime soon. I don't think this means that MS will try and build their own network, as that would be very costly to implement. Instead, I believe MS will sit back and wait. They have Windows 7 (Vienna) in the pipes with Gates talking about Live! interface to stream desktop setups to toher computers (nice idea, but it won't work in fiber-less America). MinWin (a component of Win7) sounds promising, especially in the field of gaming where freeing up as much resource as possible is the ultimate goal (hence why most gamers are miffed that DX10 will not come to XP).

The decision to walk away came as a surprise, given that many analysts believed Microsoft wanted to close the deal badly enough to either sweeten the offer or pursue a hostile takeover — a risky maneuver that would have required shareholders to replace the Yahoo board that spurned the bid.

But Ballmer said he concluded that pursuing the hostile option through a so-called proxy battle was "not sensible."

The software maker conceivably could renew its bid later this year if Yahoo can't bounce back from more than two years of financial lethargy.

Should Yahoo's turnaround efforts flop, many analysts believe the company's stock would sink into the mid-teens and open the door for another takeover offer that would be more difficult to rebuff.

For now, at least, Microsoft appears to believe it has enough internal weapons to chip away at Google's dominance of the booming Internet ad market.
- Source

Yes, internet marketing. I'm sure that's exactly what MS is thinking. Why do market analysts always think in such minuscule buzz terms? The availability to Yahoo's network provides much, much richer possibilities than just advertising. Which was failing and will most likely continue to fail. MS will renew interest. The real question: will Yahoo go bust before MS makes that next deal.