At This Point Yahoo Is Just Stalling

Yahoo continues to struggle against what looks more and more like an inevitable takeover by Microsoft. Recently the last ditch possibility of rescue by AOL or News Corp was finally shuttled, leaving Yahoo to twist in the wind. What an ill wind it is, too - two shareholder lawsuits, a hostile takeover bid that went to proxy, mixed reviews on its recent foray into Open ID, and a bevy of financial woes.

The shareholders of Yahoo stock are upset with the company for rejecting what they see as two viable bids from Microsoft in the last year. Meanwhile, Microsoft has declared they will not be increasing their bid, which they already consider more than fair, and have chosen to go the proxy route instead. You can be fairly certain the shareholders will most likely side with Microsoft on this one.

One of the delays in moving forward has been the wait for Yahoo to elect a new board of directors. By delaying the election of a new board, Yahoo may have bought itself several months grace period, well into summer. “Our objective here is to enable our board to continue to explore all of its strategic alternatives for maximizing value for stockholders without the distraction of a proxy contest,” Yahoo chief executive Jerry Yang wrote to employees yesterday.

Interestingly, the possible delay is not a guarantee. Microsoft can still embark on its proxy bid with the current board in place. Considering the support it has among the shareholders, it may yet decide to do just that. Some optimists also continue to point out that Microsoft could still raise their bid, but I see that as highly unlikely at this point.