Reset: What’s Next for Yahoo? (Merging With AOL? New Execs?) | Kara Swisher | BoomTown | AllThingsD

In addition, such a move–which was once opposed by some Yahoo execs–would now be seen as injecting energy in the company.

I make no notion of hiding my love of many people who are at Yahoo, I have made many friends there both from Right Media and even Yahoo proper (though many have left Yahoo already).  Still, it has to be disconcerting and worrisome to anyone involved to be reading something like this.  When you are going to be getting energy from the slow lumbering beast that is AOL, you know you are in some fundamental trouble.

My suggestion? 
1) Choose some people and give them control.  There are still plenty of people at Yahoo who want to turn things around.  Or believe, given the lee way, they could help change things for the better. 

2) Let them run amok.  Clear all hurdles in the way.  The goal here is to give them enough rope to hang themselves and make sure at the end of it, no one can say “i couldn’t do it because x,y,z was in the way.”  Some of the initiatives will fail, but the responsibilities and ownership is what is the most lacking now.

3) Hold them responsible.  Once all the hurdles are cleared, then the person should be held responsible for their product.  Maybe the initiative failed, maybe it was due to market forces, so be it, but with the power you have given them, they need to also be held responsible for what occurs.

Essentially, there seems to be too much “this is getting in my way, that group isn’t cooperating.”  Have each group pitch their vision, choose one, and let them have the perogative to get it done.  Tech getting in the way of Product getting in the way of Business will mean nothing gets done…which coincidentally seems to be the current world.

All of this would not be helped in the least by AOL coming into play.  More territorial fisticuffs will just delay anything actually getting worked on and done.  For same reason, a Microsoft buy wouldn’t have helped, AOL doesn’t help.

I have absolutely no doubt that Yahoo can rebound.  You can’t walk 10 ft without bumping into some really smart hardworking people.  But without some strong characters to point in a single direction, nothing is getting done.

End of Rant.

Curiosity piqued, I wanted to go and compare what happened in the Oracle BEA case versus Microsoft and Yahoo.

Oracle offered 25% premium over market price at $17 per share, it was considered low by BEA.
After some public fighting.
The final buyout price was 19.375. Which made the total over premium about 40%.

On the other hand, Microsoft offered $31 per share at a 62% premium. At the $33 they were willing to pay, it would be about 73% premium, at the 37 asked it would be 94% premium. In other words, if they ended up aroudn 34-35, it would be a similar increase in premium price (~15%).

So, in the end, is the problem just that Microsoft’s initial bid was too high?

In alternate reality land,
Microsoft offers at a $29 price for 52% premium. Eventually leading to a $33 deal.

50% is a high premium (see EA’s bid on Take Two), and I don’t think anyone would have blinked an eye at such a number.

Here’s my take:
Balmer wanted to close the deal fast. He figured, instead of going through a protracted and lengthy buyout discussion, he’d just circumvent it by offering essentially what the final price would be. Surprising to Balmer, not surprising to everyone else, Yahoo didn’t want to take the first offer.

From here, you can see why everything played out the way it did. Balmer thinks his offer makes perfect sense and refuses to outbid himself. Yahoo thinks if Microsoft is willing to pay this much, clearly they must be worth even more than that.

So where does that leave things? The big winner is GOOG. YHOO and MSFT are doing enough by themselves to sabotage their chances of winning without GOOG needing to jump in.

YHOO may do well, supposedly Panama is on its way up. The display product (AMP!) isn’t half bad (though not half good either), and hopefully will become a base for all display across the internet (though at the rate they are bleeding talent, I wouldn’t hold out hope here).

MSFT is exactly where it always has been. If they take my advice, they’d just start hiring all that talent that Yahoo is bleeding. Live, Hotmail, MSN aren’t bad brands. They aren’t winning, but they aren’t unknown to the average user. Internet Explorer is still the dominant web browser. If they were buying YHOO for the talent, and the talent is leaving in droves, they could just buy up the talent. Start with one or two good guys and let the good ole networking effect take over from there.

So, at this moment, Yahoo is at 24.08.

It looks like the stock hasn’t plummeted as far as people feared it would. Looks like there is still hope out there for an Oracle-BEA situation.

So, my thoughts as an ex-yahooer.

I feel bad for a lot of my former coworkers. There was a lot of uncertainty recently, and now they won’t even be getting their double-triggers. I am hoping for their sake it is the Oracle-BEA situation.

On the plus side, they no longer have to fear their project (AMP!) is going to get scrapped.

I would love to hear from existing yahoo-ers about their thoughts on all this.

Hm…This Yahoo stuff reminds me of something…

http://valleywag.com/378098/now-ballmer-and-murdoch-versus-yang-schmidt-and-falco

Ah yes.

It reminds me of a game of Diplomacy.

Right down to the taking over of people (Microsoft-Yahoo). Teaming up (Yahoo-Google, Yahoo-AOL, Yahoo-FIM, Microsoft-FIM). Even the amateur tactics (see Balmer and Yang letters). Only thing left is the backstabbing.

P.S. In case you are wondering which is Yahoo, that would be Austria. They are position right in the middle of everything, and can’t possibly win. The only thing they can do is try to team up with their neighbors before they are completely conquered by someone.