We haven't heard any fat ladies singing, so I guess it shouldn't come as any real surprise that we haven't reached the final act in the operatic Microsoft/Yahoo drama.
Microsoft said Sunday that it was not thinking about acquiring Yahoo anymore -- though it could if it wanted to in the future -- but that it was talking to Yahoo about some kind tie-up.
Yahoo released a statement subsequently which noted Microsoft's current lack of interest as an acquirer. But it was mum on Microsoft's interest in doing some kind of deal.
There is no detail in Mirosoft's statement about what the "transaction" might be (though we note the respectful use of the exclamation point) and there was no comment from Yahoo at all. But the New York Times cited "people involved in the confidential discussions" as saying that Microsoft has in mind a partnership or joint venture for search-related advertising.
Yahoo and Google have been pursuing something that sounds an awful lot like this for a while now and could even be on the verge of making a formal announcement soon. And it might not exactly be a deadline but
Yahoo's annual meeting is July 3, and one can see the wisdom of having something tangible and impressive to dangle in front of shareholders, many of whom might be angry with the collapse of the Microsoft deal and the minimum 73% premium ($33 vs. $19) it placed on the value of their company.
Despite founder Bill Gates insistence that Microsoft would pursue an independent path to improve search it's clear that the Redmond company just can't quit Yahoo. The Goliath of the personal computing era,
Microsoft has struggled to compete with even Yahoo for internet dollars and hearts and minds. Both have been eclipsed by Google, the acknowledged leader in online ad-supported search.
In the two weeks since that Microsoft walked away from their takeover attempt there has been a growing sense that the final chapter in this saga has yet to be written. Only Thursday billionaire corporate raider
Carl Icahn announced a hostile bid to elect a majority to Yahoo's board, calling the company's negotiating stance with Microsoft
"irrational."
Yahoo replied that Icahn had seriously misjudged the situation -- and perhaps it is only coincidence that Microsoft seems to be proving Yahoo correct.
All this — and a suspicion on the Street that it doth protest too much — has kept Yahoo's shares well above pre-overture levels of
$19. Indeed, they closed the week at $27.16 and it's not difficult to imagine, all things being equal, that they will pop at again Monday at the open.
