One thing we know: Microsoft (NSDQ: MSFT) and Yahoo (NSDQ: YHOO) didn't spend this past weekend furiously hammering out a last-minute agreement. As such, we've been deprived of the inevitable Wall Street Journal writeup detailing the negotiations, right down to what topping Jerry Yang ordered on his pizza. Instead, we're left wondering what's on Ballmer's mind. Walk? Go hostile? Depending on who you listen to, either Ballmer has to walk or he has to go hostile, so that helps. FT, meanwhile, suggests we can expect a decision 'mid-week'.
One theme that's emerged: Ballmer and Yang, in addition to not seeing eye to eye with each other, don't see eye to eye with the rank and file internally. WSJ has reported that Microsofties are rooting for a walk. Mary Jo Foley suggests the same thing. We also know that Microsoft shareholders would like to see the company walkthough it's interesting to note that Microsoft shares fell meaningfully today, not suggestive of a market that anticipates a withdrawn bid. Down in Sunnyvale, top brass don't want to see their shares drop back towards $20. Game theorists should be having a field day with these games of chicken wrapped in a prisoner's dilemma.
Remember when the bid was first announced? Every single analyst we heard from said it was just a matter of if, not when. So how did things get to this point? Paul Kedrosky has a whithering analysis: "What should happen is this: Ballmer should re-canvass Yahoo's largest shareholders and ask what firm price in cash would get them on-board, and then offer it. No more futzing through middlemen bankers, just ask and deliver. I doubt this will happenBallmer is caught up among internal politics, his own increasing impotence, and childish Yahoo intransigenceso he is stuck and looking more and like someone who keeps threatening to ground his kids, but never does. As we have all learned from watching SuperNanny, the trouble is rarely with the kids; it's almost always the nitwit parents."
By Joseph Weisenthal