As Kara Swisher drives herself to southern California for All Things D, she solves some of the mystery about why Steve Ballmer suddenly walked from the Yahoo negotiations a few weeks back (because his partner, Bill Gates, never liked the deal).
Kara also reports that Microsoft really would prefer to buy Yahoo’s search business and is not just faking interest so it can swallow the whole company. Kara says neither Yahoo nor Icahn like the a la carte deal and both are hoping to persuade Microsoft to buy the whole thing for $34-$35. Kara says if a deal doesn’t happen this weekend, Yahoo will do the search deal with Google (finally).
To Kara’s reporting, we’ll add our own: a Microsoft source told us we were off base this morning in our assumption that Microsoft was using the WSJ to convey a message to Yahoo shareholders that Jerry Yang and David Filo might still be holding out for $37 and that this was preventing Microsoft from negotiating to buy the whole company. The source said Microsoft really is interested in buying the search assets and selling off the Asian ones.
So, in our opinion, Kara’s report makes sense.
In our opinion, Bill Gates throwing cold water on the Yahoo deal also makes sense: We think someone (or many people) Steve Ballmer trusts got to him over the course of the negotiations, and we doubt anyone has more influence than Bill.
Lastly, it makes sense to us that Icahn would prefer a sale over a break-up (guaranteed exit price). It also makes sense that Yahoo would be more in favour of doing a search monetization deal with Google than “selling” search to Microsoft and, therefore, that an outright sale of the company would be a more attractive Microsoft option.
So… we don’t know about the “weekend or bust” aspect of Kara’s report (these deadlines seem fluid), but we’re on board with the rest. We still think an outright sale is more likely than a ginsu deal, but we don’t think the chances of either are much higher than 50/50.
So, as we wish you all a great Memorial Day weekend, we’ll leave you with our odds (and Kara’s graphic, which we’ll either need again real soon or never use again):
- 40% chance Microsoft acquires Yahoo for $34-ish. 40% chance of no Microsoft deal and a Google-Yahoo partnership 20% chance of an asset sale.
Best for the weekend!