This train wreck is going to be interesting. Jerry just sent out the following email. Here is part of what he says.

we believe microsoft’s proposal substantially undervalues yahoo!—including our highly recognizable global brand, large worldwide audience, significant recent investments in advertising platforms, future growth prospects, our ability to generate free cash flow and our earnings potential as well as substantial unconsolidated investments (like alibaba and yahoo! japan).

Do tell…

second, our substantial operating cash flow, which we expect to grow in the double digits in 2009, gives us the financial flexibility to execute our plans.

Ah so you have already written off 2008? Now that is interesting. You are looking forward to 2009 and how you will grow in double digits? Jerry WTF? Sorry but what have you been smoking? Have you looked at your company lately at all?

Here is one of Jerry’s ideas.

mobile, as an area of focus, is the biggest emerging starting point in the world. with twice as many mobile users as personal computer users and projections for substantial advertising growth in mobile, we have an important competitive edge as the number one mobile destination in the u.s. and we are building a superior mobile experience for yahoo! users to further capitalize on this opportunity.

There is thing called the 3GSM conference going on in Madrid. Are you there? Do a search at and the terms “3GSM yahoo.” Answer NOTHING, NADA, ZIP! Oh wait there is somebody there.

Not one to make smug predictions myself, or spoil the 3GSM party, I’ll just pinch those of Christian Lindholm, also known as “the father of the Nokia S60 user interface”, former director of Yahoo mobile and now director at design consultancy Fjord. Lindholm believes that 2008 will be the year the mobile internet becomes useful.

Cool, not only are you not there. BUT your former director of Yahoo mobile, remember in your email you said mobile is an area of focus, is there working for another company.

Here is what I think might happen.

  1. Microsoft makes a counter bid at around 32-33, and says that’s all folks.
  2. Jerry says no.
  3. Board says no.
  4. Market says maybe and this is where it gets ugly.

If Microsoft cannot get the shares via the market watch Yahoo drop like a rock. What Jerry is not getting is that there could be revenge in action. Right now there are many institutions and their aim is to be profitable. If they get caught in a downslide these institutions will bring down an axe. I am even thinking they will ride the Yahoo shares into the ground. Then I doubt any institution will touch the shares. This will dry up buyers running Yahoo into the ground. After all what if some of these institutions happen to put SELL ratings on yahoo?

If Yahoo, the board and Yang blow this I would not be surprised to see Yahoo trading around 8 to 10 dollars at the end of the year. And then NO MATTER how much Yang believes in Yahoo people will bail ship because at the end of the day its all about the share price! Why work at Yahoo, and be paid in valueless options? I know I wouldn’t.