Rarely has a struggling business seemed so nakedly up for grabs as Yahoo. Predators have been smelling blood in the water for months now and are moving in for the kill.
But it seems poor Yahoo can't do things right, even when it comes to selling itself.
In a surprise move, Yahoo has imposed -- or attempted to impose -- irksome nondisclosure conditions on bidders for the company. In simple terms, this means that, in order to get access to the confidential financial information it needs to see before making an offer, potential bidders must sign papers forfeiting the right to coordinate a bid with other interested parties.
The immediate result seems to have been the disengagement of several private equity firms that might have mounted a joint bid for the business. It had been reported, for example, that private equity firm Silver Lake was looking to join with Alibaba and other parties in a consortium to acquire the company. Jack Ma of Alibaba has repeatedly expressed an interest in buying his American partner, and it seems possible that the Chinese Internet group might consider a solo bid.
Microsoft is also showing interest in picking over Yahoo's bones, although it is unclear, given the nondisclosure restrictions, how Redmond could play a role in supplying finance in a joint bid with other partners. Microsoft's acquisition of Yahoo would, among other things, help it to leverage its Bing search engine toward profitability.
Talk of a reverse merger between AOL and Yahoo has repeatedly been greeted with skepticism. Although it's hard to doubt that Tim Armstrong, AOL's CEO, has been floating the idea, few see value in tying together two companies with more than their fair shares of bad ideas, inept strategies, and weak results.
Indeed, the only good news Yahoo could point to recently was a set of third quarter results that although bad -- profits down 26 percent -- were not actually as catastrophic as everyone had expected. This followed the acrimonious firing of Carol Bartz, Yahoo's third CEO in six years, and fierce criticism by investors of the company's hapless and seemingly ineffectual board.
Given the quantity of information about Yahoo in the public domain, it seems possible that a Microsoft-funded consortium could get most of their ducks in a row for a bid before signing the restrictive agreements that would prevent further discussion among the bidding partners. Only then, of course, would they finally get to see confidential financial records. Last minute bumps in the road can't be ruled out.
While it's evident that business-as-usual is no longer an option for one of the Internet's pioneering search and Web portal enterprises, don't underestimate Yahoo's ability to mismanage its own demise.
— Kim Davis , Community Editor, Internet Evolution