Yahoo is Right to Turn Down Microsoft
May 4, 2008 by Jayvee Fernandez
Filed under Computers
Despite Ballmer’s bravado, Microsoft raised its bid for Yahoo but Jerry Yang didn’t bite. Michael Arrington suggests Yahoo has committed corporate suicide to preserve its honor from being raped by Microsoft.
I disagree. Yahoo is right to turn down Microsoft. This was an act of courage, not suicide.
Sure, when the Tokyo stock market opens in several hours, Yahoo shareholders will go nuts. They didn’t get their nice big fat payday. Yahoo stock will probably take a pounding.
Shareholders, shareholders, shareholders. That’s all I’m hearing from Ballmer and the blogosphere right now. Think of the shareholders, they say.
I say think of the customers. A Microsoft-Yahoo acquisition could have meant a nice fat one-time payday for shareholders, but it would have meant bleh to customers around the world. In fact, the Microsoft-Yahoo proxy board would have been exactly the right bunch of suits to kill any innovation left in Yahoo.
This is the problem when the stock market dictates a technology company’s agenda: independence and innovation are frowned upon in favor of instant gratification. Ever since its IPO, Google has expressly avoided letting the stock market interfere with product innovation. People were shocked at first, but Google share prices have just been rising since.
For what could be the first time in its history, Yahoo is foregoing its shareholders’ instant gratification in order to ensure long-term value. They will take a pounding for it in the weeks to come, but they will come out stronger for it. Jerry Yang is doing what Steve Ballmer wishes he could do: what Google does.
Spoken like a true Microsoft hater. The fact is there is no competition against Google and this would (hopefully) bring increased competition to the market. This would be good for all of us. Also, Yahoo has clearly demonstrated that they cannot execute a business strategy and grow the business. The past few years evidence that. Don’t like Microsoft – but the market needs this combination of resources.