Yahoo rallies the troops

By Michal Lev-Ram

When do CEOs file their rally-the-troops internal memos with the U.S. Securities and Exchange Commission? When they’re in a fight-for-your-life battle with Microsoft.

Yahoo chief Jerry Yang took the step of copying regulators on an all-hands e-mail about Microsoft’s (MSFT) hostile $45 billion bid for Yahoo (YHOO) that was sent to company employees Wednesday morning.

In a memo titled “Building on our Strengths,” Yang wrote, “As we’ve said, no decisions have been made about Microsoft’s proposal. Our board is thoughtfully evaluating a wide range of potential strategic alternatives in what is a complex and evolving landscape.”

Yang added that the company has a lot to be excited about — including a digital music partnership with Rhapsody and a newly-launched version of Zimbra, the company’s suite of e-mail and collaboration tools for small businesses.

According to current and former Yahoo employees, selling to Microsoft is the last thing that co-founder Yang wants to do. “Nobody’s blood runs purpler than Yang’s,” says Jeff Weitzman, former senior director of client services at Yahoo.

The memo is another sign that Yang may be worried about losing key “Yahoos” as the battle with Microsoft drags on.

“As we look to build on the progress we’ve been making, I want to make sure you all realize how essential you are to Yahoo’s success,” he wrote in the e-mail.

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Filed under Microsoft-Yahoo, Yahoo, microsoft

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Yang is an irrelevant lame duck. Yahoo is likely courting a counter offer from Google, et al. They should hold out for as much cash as possible and take the rest in stock at this valuation. It is a good move for their shareholders. YHOO has peaked and the Microsoft offer is the best anyone has seen since the dot-com valuations.

Posted By Joe User, Richmond VA : February 6, 2008 5:47 pm

The board’s responsibility is maximizing shareholder value. I’d like to see their arguments that they can add MORE value than the MSFT deal. I think last time their argument was that Panama and their other initiatives were going to add it, but their stock price and performance dictates otherwise.

Posted By Justin, Redwood City, : February 6, 2008 4:57 pm

I really have to wonder how Microsoft buying Yahoo was going to benefit anyone. If they can’t beat Google then buying someone else isn’t going to beat Google either. Microsoft has enormous resources so it isn’t a technology problem, it’s a business management problem. They buy Yahoo and still have the same old business management problem.

Posted By St. Louis, MO : February 6, 2008 3:48 pm

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