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Yahoo's for Sale -- but Why Would Anyone Buy It? [Update]

Will anyone show up?
Stuck in the middle of the WSJ story on Yahoo (YHOO) firing CEO Carol Bartz was a telling line from a source: "One of these people said Yahoo is open to selling itself to the right bidder." Yup, the company has all but planted a for-sale sign on the front lawn, as Henry Blodget put it.

Not that it should be a surprise. Bartz herself said she'd sell Yahoo for "the right price" in March 2010 when asked if someone had offered to buy the company then. And making the CFO the temporary CEO? It's the board saying, "Come buy us. Please?" Only, no one in their right mind would want to buy the company as it's currently structured, any acquisition of the good pieces will be at fire sale prices.

Forget a white knight rescue
Yahoo is stuck. At this point, it seems unlikely that anyone with the skills, experience, and training to pull the company out of its rut would be too smart to work there. The problem isn't just the company, which is such a hash of different businesses as to make an old-fashioned conglomerate look coherent in comparison. Someone could spin off or sell some aspects and find a focused core.

The problem is the board, which has been inept. First it watched the company sink into a malaise and then spurned the $44.6 billion acquisition offer from Microsoft (MSFT) because a 62 percent premium to share price wasn't enough for either the directors' greed or their egos. It set the company's losing strategy and then hired Bartz and made her the most overpaid S&P 500 CEO.

Why would a good executive take on a challenge like Yahoo given the likelihood that the board would handcuff him or her? A no-win situation is no way to advance a career. Taking the Yahoo CEO job would be an act of charity.

About that price
Realistically, that leaves an acquisition as the only option. Only, who would bid on the company as it now stands? Microsoft, which already has what it wanted through the original search deal? Apple (AAPL), which is focused and would have no use for Yahoo? Google (GOOG), which, even if it wanted Yahoo, wouldn't get antitrust regulators to sign off on that size of a deal? AOL, which probably needs a buyer itself? A newspaper like the New York Times?

Given Yahoo's size, spread of businesses, and the proven ridiculous expectations of the board, there's pretty much no one out there who'd offer enough to satisfy the directors. Eventually, I suspect, you'll see the board succumb to desperation as the company's revenue keeps dropping and its stock price slumps further.

At that point, the board will have no option but break the company up into its component parts, hold a yard sale, and hope that they get enough to keep the shareholders from a lawsuit -- or a barrel of tar and sack of feathers.

[Update: Looks like Yahoo co-founder and former CEO Jerry Yang has officially told company vice presidents that Yahoo is not for sale. Even though it is hiring advisory firms to explore those options. Maybe there's a secret plan, which, in the case of Yahoo, would be more like double secret probation. In any case, I doubt that any of the people who got the message actually believed it.]


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