Monday, November 17, 2008

News Flash: Yahoo Boots Yang

Jerry Yang finally yielded to sanity and the pressure of his company's board:

Yahoo Inc. said Monday that its co-founder and chief executive, Jerry Yang, will step down after the company finds a replacement, following a tumultuous and short tenure that included the company's rejection of an offer by Microsoft Corp. to buy the company.

I mention this because Yang was the sole obstruction to Microsoft's acquisition of Yahoo earlier this year. YHOO closed at 10.63 today, about a third of what MSFT was ultimately willing to pay, so this move obviously leaves the door open to a renewed bid at a much lower price. MSFT has every incentive to renew the offer as Google continues to widen its lead in domestic web searches. Finally, there is no longer an antitrust obstacle to a Microsoft-Yahoo merger now that Google has pulled out of its search ad partnership with Yahoo. Watch this blog for a future special situaton play.

Note to all aspiring company founders: It's not "your" company anymore once you go IPO. If you need a good model of how to exit gracefully after founding and growing a company, look at how Bill Gates gradually wound up his control relationship with Microsoft.

Nota bene: Anthony J. Alfidi does not hold a position in YHOO, GOOG, or MSFT at the time this commentary was published.