Microsoft’s Chief Executive, Steve Ballmer, cleared the air on Friday that the company might still be interested in buying Yahoo, setting off a 13 percent decline in Yahoo’s share price. Yahoo shares dropped $2.20 to a paltry $9.35 in afternoon trading. The news also sent Microsoft shares down 57 cents to $19.02 and is just above a ten year low of $18.74 which it reached last week.
Yahoo's stock, which jumped on the company co-founder and CEO Jerry Yang's departure from his position at the helm, opened the door to the renewed speculation that a Micro-hoo deal might be back on the cards, was brought crashing back down to earth in mid-day trading on Wednesday.
Some analysts said that Ballmer is still interested, but that the public disinterest is a duplicitous tactic to purposefully drive down Yahoo's value. Microsoft had offered $47.5 billion or $33 a share back in May, which must seem like light years away for throngs of irate Yahoo shareholders.
“We moved on,” Mr. Ballmer told a business luncheon in Sydney on Friday, when asked for the company’s plans after a possible Web search advertising partnership between Yahoo and Google fell through this week.
Mr. Ballmer said Microsoft made several attempts to reach a deal with Yahoo but that they failed. “We are not interested in going back and relooking at an acquisition. I don’t know why they would be either, frankly,” Mr. Ballmer said. He added that he thought there were still opportunities for some kind of partnership around search engines. No news on the replacement for Mr Yang, which is expected to take anywhere up to 12 weeks.
With an additional 1,500 layoffs announced by Yahoo scheduled for January, a failure to close a shared advertising revenue deal with rival Google, an inability to come to terms with Microsoft, a drop in profits and the stock in the proverbial toilet, the future is looking less than peachy for the struggling web giant.
Just as with the new appointment to the White House commencing in January will face unprecedented economic hardship, certainly in more than a generation, the victor taking on the leadership duties at Yahoo will no doubt feel a similar strain.
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