On Jan 31, the day before Microsoft offered $31/share for Yahoo, YHOO was at $19.18/share (market cap: $26.4 billion) and MSFT was at $32.60/share (market cap: $303.6 billion). At the close of trading today, YHOO closed at $24.37/share (market cap: $33.5 billion) and MSFT was at $29.08/share (market cap: $270.8 billion). In other words, the Microsoft offer increased the value of Yahoo! Inc. by more than $7 billion and decreased the value of Microsoft Corporation by almost $33 billion. In still other words, in attempting to take Yahoo by force, they let an amount equal to Yahoo slip through their fingers. Why isn't anyone writing about Yahoo's amazing stock gains and Microsoft's plunge?

We have seen extensive press coverage of Microsoft's pursuit of Yahoo over the last few months, including notably excellent coverage from Silicon Alley Insider and the Wall Street Journal. However, I have not seen a detailed analysis of how a full hostile takeover might play out -- the kind of analysis that you would be receiving if you were a Microsoft or Yahoo board member.

So I asked a pair of expert corporate attorneys -- Michael Sullivan and Ed Deibert at Howard Rice Nemerovski Canady Falk and Rabkin in San Francisco -- to work up such an analysis. What follows is their take blended with my commentary.

Two Detroit pension funds have sued Yahoo Inc. and its board of directors, saying they breached their duties to shareholders in trying to thwart a takeover by Microsoft Corp.

The lawsuit was filed in Delaware Chancery Court on Thursday by lawyers representing Detroit's police and fire retirement system and general retirement system, as well as "all other similarly situated public shareholders."

Yahoo! is jumping on the OpenID wagon and is making it possible to use your Yahoo! account as a valid OpenID. That's another quarter of a billion OpenIDs out there! Put that together with the fact that AOL made their AIM logins work as OpenIDs as well and most everyone in the US at least will already have an OpenID.

California Rep. Tom Lantos (D), a Holocaust survivor known for his dogged commitment to human rights issues, died early this morning at Bethesda Naval Medical Center after a bout with esophageal cancer. He was 80 and had served in the House since 1981.

This was the same Tom Lantos who really railed against Yahoo's CEO and counsel regarding the imprisoned Chinese dissidents.

After careful evaluation, the Board believes that Microsoft's proposal substantially undervalues Yahoo! including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments. The Board of Directors is continually evaluating all of its strategic options in the context of the rapidly evolving industry environment and we remain committed to pursuing initiatives that maximize value for all stockholders.

This morning the OpenID Foundation announced that Google, IBM, Microsoft, VeriSign, and Yahoo! have joined the board. The OpenID Foundation was formed in early 2006 by seven community members with the goal of helping promote, protect and enabling the OpenID technologies and community. Today’s announcement marks a milestone in the maturity and impact that the OpenID community has had. While the OpenID Foundation serves a stewardship role around the community’s intellectual property, the Foundation’s board itself does not make any decisions about the specifications the community is collaboratively building.

We, the undersigned, wish you would just leave Flickr alone. OK?

thxkbai

Yup, interesting how this turns out.

The Borg-Yahoo merger won't work. Here's why. It's like taking the two guys who finished second and third in a 100-yard dash and tying their legs together and asking for a rematch, believing that now they'll run faster.

Yahoo has been on the ropes for a long time.

Once the top dog of the internet, the company has been haemorrhaging users and money. With advertising income not anywhere near where it should be, Yahoo's share price is stuck in the doldrums.

Last June Yahoo's board chucked out chief executive Terry Semel and brought back co-founder Jerry Yang to recapture the firm's dominance - to little avail.

One word explains all of Yahoo's troubles: Google. While Yahoo invested in content to lure its audience, the search engine rival simply focused on delivering what users really wanted: good search results.

...

For Microsoft, however, this is the deal that could break it.

Making the offer is an admission that Microsoft's management has been scared by the success of Google.

The bid is also an acknowledgement that its numerous attempts to become a dominant internet content provider have failed.