Eating yesterday's lunch

Microsoft, having failed in its takeover bid for Yahoo, will now go after them the hostile-takeover way: buying shares on the open market. That'll drive the price up, presumably, but Microsoft has the money to do it if they want to. But even if they do, they're not going to win the search engine war with Google, which has transmogrified itself into far more than just a search engine. "Microsoft's proposal is seen as far more than a pure business decision at Yahoo, which prides itself on a quirky, fun style that it fears would be crushed under the corporate feet of the world's largest software maker. Analysts believe that Google only benefits while Yahoo and Microsoft are distracted by the takeover quest. Google has steadily increased its share of the online search market and Yahoo is said to be losing value as workers leave for jobs elsewhere to avoid becoming part of the Microsoft machine." Yahoo posted unimpressive earnings in the first three months of this year, indicating to Enderle and other analysts that Microsoft's offer of 31 dollars per share is too high and that Ballmer might simply walk away from a deal. Yahoo's stock price has been propped up by investors banking on Microsoft's offer becoming successful and could collapse if the bid is withdrawn, analysts say. Such an outcome would surely trigger lawsuits by Yahoo stockholders accusing the board of directors of failing in its duty to maximize the value of their investment. Microsoft reported Thursday that its profits slipped to 4.38 billion dollars in the first three months of the year despite revenues rising slightly to 14.45 billion dollars.

Rico says it's not going to taste good when Microsoft finally swallows Yahoo; if everyone at a software company bails (except the idiots, who stay for the money), what did you buy?