Yahoo! and Microsoft. Yahoo! as losers?

Much of the press around the MSFT offer for Yahoo! has a dirge like quality reflecting a sense that one of the Internet's most important and creative companies has become road kill. The size of the initial offer, $31 per share and $44.6 billion, got me thinking about how big the losers at Yahoo! really are.

Since Yahoo!'s IPO in April 1996 its stock is up approximately 1,500%. Over the same period the S&P 500 is up about 15% and MSFT about the same. That said, during the height of the bubble, Yahoo!'s stock was up approximately 9,000%. Nonetheless, an impressive performance.


Even understanding the emotion around Yahoo!'s potential sale, and how it reflects Google's dominance in search, it's a bit hard to see this as a poor performance.

On the question of whether a Yahoo! MSFT merger will work my vote is no. The cultures are extraordinarily different and MSFT has historically been a 2nd tier Internet player--the area for which they need Yahoo!. Putting together the two struggling entities and expecting a positive result when Yahoo!'s management confronts the bulldozer Gates/Ballmer team sounds like a loser to me.