Does the Chief Yahoo get to wear a dunce cap? What a fitting and ignominious end to what will go surely go down as the biggest CEO gaffe in history.
Jerry, you turned down a $33 per share offer from Microsoft! You did, you really did. Now, you must sit in the corner with that dunce cap on crossing your fingers that Daddy Warbucks in the form of Steve Ballmer comes and bails you out.
Jerry, sit down you ignoramus. You should be thankful that your hand-picked board lets you keep an office. "Chief Yahoo" is the perfect title for you.
Now what?
Steve Ballmer, it’s your move. Only a few months ago, you offered to pay some $45 billion for the company. Granted, the now Chief Yahoo royally screwed up, but he is no longer in the picture.
Even better, with Yahoo (YHOO) shares trading below $12 per share, you may be able to achieve your original objectives at half the price. There are no excuses. I understand egos, and you had every right to be upset, but now is the time to bury the hatchet.
Let’s not forget why you made the move in the first place, Mr. Ballmer. Microsoft (MSFT) is trying desperately to catch up to search engine leader Google (GOOG). The race goes way beyond search.
For the first time in your history…
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…you are now facing a viable threat to your own long standing monopoly. Not only is GOOG the king of search, but they are slowly encroaching on your home turf of software, navigation and operating systems.
Your original bold offer for YHOO was brilliant. I cheered your move then and even suggested that you be willing to pay up to $35 per share for the company in order to get the deal done.
Yes, that would have been overpaying, and in hindsight it would have been way overpaying, but hindsight is 20-20. You stuck to your guns, and now you get to reap the rewards.
That reward, if you are smart, will be to acquire a very valuable asset that can help you in your battle with GOOG. While that battle may not seem like much now, it will be quite intense a few years from now.
GOOG is not going away. They are only getting stronger.
You must do the same. Buying YHOO will most definitely make you stronger, and I’m talking about the entire company, not just search. While it is convenient to think that buying search may be a cheaper and more targeted strategy, owning the entire company has benefits that will help you in the long-term.
Besides, taking the company in pieces could be quite messy. It is far better to keep the entity whole. YHOO traffic alone is worth something. Yes, the new Chief Yahoo could not figure out how to best monetize that value.
It will not be hard for your management team to extract value from this asset.
Go for it. The time to move is now. $15 per share sounds like a nice round number. Make the offer before the end of the year and the company is yours.
This article was written by Jamie Dlugosch, contributor to InvestorPlace.com. For more actionable insight like this, go to: www.InvestorPlace.com.
