The Internet has been following the Microsoft/Yahoo deal for some time now. It was all the news for awhile. Talks of a possible buyout where Microsoft would buy Yahoo. Yahoo refused and played hardball and this led to Microsoft withdrawing the offer. Then we hear the two companies are in talks again to work together in other ways short of a buyout. Then yesterday, Yahoo announces that talks have concluded. Case closed. Microsoft, screw you.

Yahoo threw the baby out with the bath water. Shareholders are left drowning.

The final stake in the heart was the announcement that Yahoo was partnering with Google to have Google ads on Yahoo’s website. Despite the clash of cultures between Google and Yahoo, the Yahoo board ultimately decided they’d rather sell out completely than work with Microsoft. Yahoo CEO Jerry Yang tried to put a positive spin on this in a conference call, saying the partnership offered a fast track to growth.

Yahoo stocks nose-dived yesterday on the news.

The end result is that Yahoo, in my opinion, has just thumbed their nose at Microsoft AND their shareholders. As a public corporation, their only legal obligation is to increase profits for the shareholders. Despite the fact that there is a culture clash between Yahoo and Microsoft as well, I still think the deal would have been better for shareholders.

The whole idea of partnering with Google was supposed to be a threat to Microsoft. I thought it was them telling Microsoft “Offer us more money or we will go help Google make even more money”. Now, they’ve turned around and actually done exactly that. Yahoo will kill their own advertising business and send everybody to Google. Google’s monopoly increases. Their deal with Google is non-exclusive, but it is still a huge blow to their in-house ad customers.

Yahoo CEO Jerry Yang is out on his own. I doubt there are many people at Yahoo happy with what happened here. And shareholders must be downright pissed off.

Yahoo was once a great company. What the hell happened?