Officially, it's now two days after
Microsoft walked away from the Yahoo deal. However, given the little information currently available (statements from
Microsoft and
Yahoo, mainly) we really can't say that much for certain. On to the speculation, then!
At this point, the most likely outcomes seem to be:
1.) A run on Yahoo's stock. Michael Arrington rightly points out that Yahoo's market cap increased from $26.2 billion to nearly $40 billion, primarily based upon the speculation that Microsoft would pay $31 per share to acquire the company. Those speculators will likely be furious, to put it mildly. Will Yahoo's stock price crater? Most likely, although the first few hours of Monday's trading session will likely tell the tale. Some have suggested that the stock price will crash down to about pre-merger-proposition levels, or about $19. My guess is that it bounces around like crazy and settles at about $22 to $24 -- people still have hope. But boy, are some people going to learn a harsh lesson about sure things.
1a.) Shareholder lawsuits. A no-brainer. Someone will pull the trigger.
2.) Yahoo ties up with Google on some search advertising. On this issue, the Magic 8 Ball seems murkier. Ballmer wanted to buy Yahoo's search team ( the "Panama" project) and if it outsources search to Google, that team may move onto other projects, Henry Blodget argues. Blodget argues persuasively that that's a good thing, as Yahoo can thus focus on areas where it can win. I'm a bit hard-pressed to tell the difference between AOL, (which outsourced its search) MSN, and Yahoo anyway; all three are portals trying to glom onto as ...