Will Google Et Al. Buy Yahoo!
Yahoo is on the selling lock. It is a valuable property and there seems to be keen interest among the big players in the online world. Perhaps it is not surprising for a company whose name ends with an exclamation point that there are some surprises here. A number of different groups seem to be putting purchase offers together with Google possibly being the latest. Since Google trails both Facebook and Yahoo in the total billings for display ads, this would be a way for Google to do some catching up.
If Google is assembling a group to invest, it could be competing with Microsoft and Alibaba (a Chinese online group), both of whom are are interested and trying to put investing groups together.
Although this seems the most likely way the acquisition will go forward, the Yahoo Board seems to be putting road blocks in the way.
If Yahoo can enforce this "no cross talk" policy. it gives it much more control over the bidding process. The company says it is not opposed to a joint bid, but it wants to encourage competition and avoid all the bidders forming one giant consortium, according to another person familiar with the situation.
Yahoo advisers Goldman Sachs and Allen & Co informed interested parties this week of a "no cross talk" provision, part of a non-disclosure agreement that must be signed to gain access to Yahoo's sensitive financial data, the sources said. Some potential buyers of Yahoo Inc are balking at the Internet company's demands for confidentiality that would prevent them from discussing joint bids, according to several people close to the situation.
The stock market evaluation of Yahoo! is currently less than half what Microsoft offered in 2008, which was rejected. The company has been shopping itself to potential buyers such as private equity firms. Such firms could take Yahoo off the public markets and try to turn around its business.
The insistence on the "no cross talk" provision to control bids from financial partnerships could heighten pressure on Yahoo's co-founder and former CEO Jerry Yang. He has been criticized for not always acting in the best interest of shareholders. The prevailing perception is that Yang derailed the Microsoft talks in 2008. He may even now be thinking of acquiring Yahoo himself and focusing more on being a premier digital media company. That may not be as far-fetched as you might imagine.