The decision of Yahoo’s co-founders, Jerry and David Filo, not to accept the 47.5 Billion Dollars bid of Mricrosoft Corporation has already cost its shareholders dearly. On Monday, its share prices slid by 15%;besides, legal woes have also started with two lawyers suing the board to account for the massive losses in shareholder’s value.
Yang who had taken over as Chief Execuive Officer about 11 months ago, has to carryout a maveric act to propel its share prices beyond the $ 33 figure to reach atleast the $37 figure which he had wanted from Microsoft Corporation. He has promised to do that by acclerating Yahoo’s net revenue growth atleast by 25% in the coming next two years.
But there are not many takers of this promise for his credibility has been undermined by the losses in the last two years. Now by not accepting the offer of Microsoft, he has incurred the wrath of irate shareholders who would make his tenure miserable when the Annual Meeting scheduled for 3rd July takes place.
If Yahoo falters again, it would go in favour of Microsoft which is expected to return with another offer which this time it may well be impossible for yahoo to resist. Venture Capitalist Todd Dagree of Spark Capital has compared the approach of Microsoft to that of a Crocodile. In his words,’ Rather then trying to eat its prey while it’s warm and tough, (Microsoft is) dragging it down to the bottom of the river, sticking it under a rock and eating it when it is cold and soft’.
Would Yahoo stay out of the river to escape the jaws of Microsoft? Well, it is doubtful.