Shareholders are looking back at Microsoft's original $44.6 billion offer and crying. I thought they were crazy
to turn down this deal and the subsequent offer in June. Today Yahoo! is worth $14.33 billion, $31 billion down from its value when Microsoft made its initial offer. As I predicted
, their market capitalization is now less than Yahoo! Japan which sits at $16.9 billion. What the hell were they thinking? They clearly thought they could pull a rabbit out of their hat. What was the source of the confidence that caused them to turn down Microsoft's offers? The failed Google deal? Even if this had gone through it wouldn't have been enough to save the directionless company.
Its time for Jerry Yang to step down. He got religious about the Microsoft deal and forgot his primary responsibility as CEO, to create value for Yahoo!'s shareholders. Now they are mired in a mess that can only end in a fire sale. In stark contrast, Yahoo! Japan has consistently performed well over many years and enjoys excellent leadership. Although 2008 will obviously be a down year due to the collapse of capital markets, Yahoo! Japan has had 23.3% average annual revenue growth and 11 consecutive years of profitability
. Maybe its time for the tail to wag the dog.
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