Thursday, April 24, 2008

Dancing for Dollars 

The dance between Microsoft and Yahoo has been going on for weeks now. Yahoo has adopted a "Just-Say-No" strategy unless... unless Microsoft pays a whole bunch more for its stock. Microsoft has taken an "accept-it-or-else" strategy that doesn't appear to be changing.

The two sides are interesting to watch because they are using PR campaigns against each other. Yahoo points to value it says Microsoft isn't considering. Microsoft says its bid for Yahoo is fair, and it won't raise it. Moreover, Yahoo hasn't found any other suitors for the price Microsoft is offering. So they dance back and forth -- each lobbing verbal shells at the other and hoping to win public sympathy.

Thus far, it doesn't appear to be working. If Microsoft moves forward with its threatened hostile bid, Yahoo's talent can walk out the door. If Yahoo stays independent, there is no guarantee the company can re-ignite growth. If the two companies do get together, the enmity between them may doom a merger from the start. One wonders why Microsoft continues its pursuit.

From a PR perspective, the longer the verbal warfare continues, the lower the chance anything good will come from the merger proposal. It's time to act.

I agree that it’s time to act. The more drawn out this gets, the worse it’s going to be for both companies. It is showing a negative side of both companies, and it could really hurt them in the end. Like you said, it really says bad things for a possible merger. I don’t think public sympathy will do much to win the situation.

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