Yahoo! Exploring Microsoft Alternatives / Poll: What Would Semel Do?

Posted Feb 6, 2008

“Our board is thoughtfully evaluating a wide range of potential strategic alternatives in what is a complex and evolving landscape.”
-Yahoo! CEO, Jerry Yang

About 6 days ago, Microsoft made an offer to buyout Yahoo! for $44.6 billion.  This sent the company scrambling to think carefully about all the opportunity costs at stake.  The value of the deal is close to double to what they were worth 6 days ago.  But if Yahoo! allowed themselves to be acquired, then they wouldn’t have as much control in the deals the acquisitions they make or how their services would operate. 

However, given Yahoo!’s steady valuation decline and their continuous loss of market share to Google, this may be the only chance for the company to survive in some shape or form.  Yahoo! is still planning to layoff 1,000 jobs out of 14,300 employees in the next few months. 

The company may be exploring alternatives such as a leveraged buyout, other acquisition suitors, and even a partnership with Google for an advertisement outsourcing deal.  Whatever the company decides, they will need to act fast.  Microsoft could pull the offer and make Yahoo! in an even more vulnerable position that they were in before. 

Mark Cuban, founder of (acquired by Yahoo!) recently gave his 2 cents: Yahoo should say Yes to Microsoft. 

Not too long ago, Yahoo! let go of CEO, Terry Semel and replaced him with Jerry Yang.  Semel passed on buying Google when they were a younger company and when they were in Yahoo!’s shadow.  Before Semel was let go, he led the company to make notable acquisitions such as MyBlogLog,, and Flickr.   But clearly it wasn’t enough for the Board. 

Based on the above information, do you think: