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Wall Street Not Happy As Yahoo Tries To Dodge Microsoft Bullet

Yahoo is rumored to be looking for alternatives to stay out of Microsoft’s clutches, and Wall Street is not happy. The rumors say that Yahoo has started up merger talks with Time Warner’s AOL unit, or rather restarted them, desperate for anything that doesn’t involve selling the company for an amount Yahoo says seriously undervalues the company. Yahoo may be playing Microsoft for more money, either out of a desire to profit or so Jerry Yang can go out with some pride.

A source close to Yahoo!’s thinking told The Times: “All they [Microsoft] are trying to do is pick off the company on the cheap. They’re trying to steal it. And the board is not going to let that happen. They have gone for a valuation that reflects the five-year low of the stock.”

The source added: “It would have to be in the 40s to start talking, and we would have to get over regulatory issues. It would have to be an offer that would give Jerry Yang something to stand on a podium and smile about.”

Valleywag jokingly reminds us that AOL lazily ripped off Yahoo’s home page months ago, so Yahoo wouldn’t even need to worry about integration.

Wall Street is already getting mad at Yahoo’s delay tactics and posturing. Investors in Yahoo are saying they are sick of losing their money, and are looking to cash out with the Microsoft offer, whether or not it is actually good for the company. That’s bad news for Yahoo, because it means that regardless of what it does, investors are likely to get pissed off and turn on the company, that is unless Yang can pull a brilliant rabbit out of his purple hat. If Microsoft does go hostile, early indications are Steve Ballmer will find all the votes he needs to takeover the Yahoo board.

February 12th, 2008 Posted by Nathan Weinberg | AOL, Yahoo Acquisition, Corporate, Yahoo | no comments