Well, almost nothing anyway. Yahoo is actually doing the right things. They don't like Microsoft so they look for another buyer or strategic alternative (ex. outsourcing search monetization to Google). When nothing emerges, they fall back on broad promises to shareholders to increase revenue. Fine, all well and good. Stall, stammer and delay is the right strategy for them.
But what about Microsoft? The way they're acting I'm not sure they really want to buy this company. Isn't the whole point of the bear hug letter to give the company notice that they have a well-defined time period to negotiate and if nothing happens the case goes right to the shareholders? After three months we should have had a war on all fronts. We should have seen them:
- acquire the 5% of Yahoo's stock allowed before the 13D gets filed;
- file the lawsuits in Delaware challenging the business judgment of the board and management and the poison pill;
- go forward with the tender offer/ offer to purchase;
- call for the special meeting of shareholders;
- nominate the new slate of directors;
- file more lawsuits challenging any attempts to stagger the company's board or delay the special meeting.
And that's just the logistics. Don't forget the PR front. Microsoft should have been taking its case to the press every day. We should have seen a constant flow of articles discussing Yahoo's weak performance, management blunders, etc. And by the way, where are the institutional players in all this? Why aren't they weighing in? We live in a world where Barry Diller does a company re-org for IAC and a shareholder is so pissed that it takes a case against him all the way to verdict but no institutional shareholder has an opinion on a 60% premium bid on Yahoo? In this economy? Why is no one from Microsoft forcing this issue either?
Why is Microsoft's next step was a second strongly worded letter with a second ultimatum? Isn't a second ultimatum an oxymoron?
By the way, this isn't to say that while all this was going on, they shouldn't have also tried to negotiate a deal directly with the company. Of course you reach out with the olive branch while you are repeatedly clubbing them. But don't stop clubbing. Your leverage increases more with each step.
As a result I'm dazed and confused. I can't figure what's driving this half-in/ half-out hostile takeover. When you decide to go swimming you can't just get a little wet and when you decide to go hostile you can't be nice about it.