Yahoo Board To Determine Fate Of Company Today

Mike offers a pretty good analysis of the current choice that Yahoo is facing. One thing that really represents the strategic blunder on the part of Yahoo’s Board is that they allowed a full week to pass without substantive comment or marketplace movement and that only reinforced the point that nobody outside of Microsoft wants this company. It is sad to say this, but that doesn’t make it any less true.

At this point Microsoft could lower their bid and still get this company. Not only does Yahoo have no leverage, as Mike points out, but they actually have a much weaker position than they did last week given the level of outsider investor control over the stock. If I were contemplating a shareholder lawsuit I would argue that the Board breached a number of duties that ultimately led not only to a loss of shareholder value through the operations of the company (which happens, let’s not go overboard) but more directly through their dysfunctional response this last week.

This is emblematic of Yahoo in recent years, despite having loads of cash they could never achieve focus and/or remake the company in a new image. Some would argue, and it’s a valid point, that they company didn’t need a makeover, what it needed was a shared sense of purpose that drove the majority of their business decisions. Who knows but those inside the company.

But before we pile on the criticisms we should look at the positives here. Yahoo’s brand is outstanding and the company has accomplished much this far, not the least of which is building a company worth $43 billion to Microsoft. Despite having the public optics of the Keystone Cops, the management team did deliver 10% operating margins and a 7% return on equity, as well as a very stable balance sheet, in a very competitive environment.

Lastly, what will be interesting to watch is whether or not Microsoft actually follows through on this bid.

Sources have indicated to us that Yahoo has scheduled a special board of directors meeting on Friday to determine, effectively, the fate of the company. After a week of hectic negotiating, it’s clear that no one is going to step in with a competing acquisition offer to what Microsoft put on the table last Friday – $31 per share. Softbank, the last real chance for a competing bid, bowed out today and said they would not be challenging the Microsoft offer.

[From Yahoo Board To Determine Fate Of Company Today]

Yahoo says it needs time to mull Microsoft offer

I haven’t commented on the MSFT/YHOO thing because, well there seemed to be no lack of opinions so why bother. Having said that, this response from Yahoo is pretty lame… they probably should have just come out and said “we need time to put together some friendly counter offers”.

Yahoo Inc said it may take “quite a bit of time” to weigh its strategic options, including keeping the company independent, following Microsoft Corp’s $45 billion offer to buy the company.

[From Yahoo says it needs time to mull Microsoft offer | Reuters]

Given the number of disappointed shareholders, including yours truly, Microsoft could very well succeed in a tender offer much like Oracle did with Peoplesoft. Institutional investors control 80% of the float on this stock and own 71% of the outstanding shares.

One very interesting thing to watch will be what the private equity guys do, but it’s hard to imagine raising this kind of debt in this kind of market so I’d be inclined to discount their status as a player here.

It’s What Is INSIDE the Machine that Counts

Mossberg says that Dell’s XPS One has the right stuff… still needs to be decrapified.

In my tests, I found the XPS One to be much better designed and equipped than Gateway’s iMac competitor, also called the One. In fact, the Dell XPS One is the first Windows all-in-one desktop I’ve tested that I believe matches or exceeds the iMac in hardware design. That’s no small feat, especially coming from Dell. [From Dell’s All-in-One PC Has the Guts, Design to Compete With iMac | Walt Mossberg | Personal Technology | AllThingsD]

The Day the Music Stopped

This post could also be called “the day DRM jumped the shark”. The momentum has definitely turned in favor of getting rid of DRM altogether, let’s hope that consumers vote with their dollars and choose DRM free content and hardware whenever possible. DRM free is a relative term but still represents an ideal we should reward content providers for enabling.

Microsoft’s PlaysForSure DRM just took another step closer to the grave with the help of some rebranding. Those of you with players from SanDisk, Nokia, and Creative among others, looking for compatible music from Napster, Real Rhapsody, Yahoo Music, Wal-Mart and such must now look for the “Certified for Windows Vista” logo, not PlaysForSure. Of course, Microsoft’s Zune is also certified for Windows Vista, just not certified for Windows Vista so it won’t play back the same protected files. Man, could DRM get any more consumer unfriendly? [From Microsoft rebrands PlaysForSure to Certified For Windows Vista, confuses world - Engadget]