As one surveys the analyst commentary and investor reaction to Yahoo’s latest quarterly financial results, it is difficult not to conclude that CEO Jerry Yang and the board must cease and desist from any further acquisition-related discussions with Steve Ballmer and his predatory crew at Microsoft.
Not only is Microsoft arguably not interested in acquiring Yahoo, at least for what most third-party bystanders would consider fair value, but it is now blatantly obvious that the distraction represented by the seemingly endless Microsoft discussions has become a major impediment to Yahoo’s ongoing operational rhythm and its long-term strategic success as a viable company.
Now that Carl Icahn, the wheeler-dealer asset flipper and attention-deficit-addled investor, has been sated, at least temporarily, with a seat on the the board of directors, it is time for Yahoo to begin acting like a real company again.
As Lehman’s Douglas Anmuth says:
“YHOO needs to strengthen core operations for the stock to work, but we think it also needs to re-engage with investors, many of whom have viewed the company as an M&A and arb story over the last several months rather than a fundamental investment opportunity.”
Indeed, it is time for Yahoo to explain where it is going strategically, to explain how it will get there, and to demonstrate tangible progress toward its objectives. Anything less just invites a revival of fevered conjecture and speculation about a return of Microsoft to the degraded bargaining table.
At this point, that’s not good for anybody at Yahoo, except perhaps for Mr. Icahn, who remains compelled to make a deal — apparently any sort of deal — to slake his inveterate urges.