A couple of months ago, Yahoo CEO Carol Bartz said it would take a “boatload of money” to get her to do a search deal with Microsoft.
Two months later, she has agreed to a deal that delivers no money upfront (last summer, Microsoft offered $1 billion up front, with a lower revenue-share). The structure of the deal, meanwhile, is tremendously complex, and it has the potential to be a logistical and regulatory nightmare for both companies.
Carol says the deal will deliver a “boatload of value.” But the market has been quick to realise that potential long-term value is not the same thing as cash.
At best, Carol look like she overpromised. At worst, she looks like she caved, and Yahoo’s negotiating position looks weak.
Resolving Yahoo’s search situation was a critical strategic issue for Carol and Yahoo. The current structure of the deal will not bolster confidence in her leadership.
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