I'd Like To See A Plan Out Of Yahoo! Instead Of A Rejection Letter
While Yahoo!'s board did not lay out a plan to increase it's stock price (I laid out one on this blog last week), they are apparently going to tell Microsoft that it's current offer is too low. The Wall Street Journal has the story here.
Some people seem to think this is just about getting another $5-$10/share out of Microsoft. And it may well be. The WSJ story mentions that the board may entertain an offer above $40/share.
I am hoping Yahoo! takes another tack. As I said in the post I linked to above, I think they should negotiate a deal to outsource their search to Google, dividend out the Yahoo! Japan and Alibaba shares to that their value isn't lost in the share price, and restructure Yahoo! to focus on the businesses where they have a competitive advantage.
Another thing they could do is offer their search business to Microsoft for a short term deal, like three years. Maybe Microsoft would be willing to pay up for that to keep it out of Google's hands.
This Fortune article seems to indicate that the anti-trust issues surrounding a business deal between Google and Yahoo! are not as large as the anti-trust issues Microsoft would face in it's effort to acquire Yahoo!
I am happy to see Yahoo!'s board taking a strong position with Microsoft, but I think they could take an even stronger one. Dividend out the Yahoo Japan and Alibaba shares to get that value out of the equation. Then put forward a restructuring plan that takes a lot of cost out and focuses on the core businesses that they make real money on. And then put their search business out to bid between Microsoft and Google. That's my suggestion.