Icahn's Move on Yahoo! a Gutsy One - But it Might Pay Off

5/16 - "...if you see Yahoo! chairman Roy Bostock walking with a noticeable limp this morning, it may be because his own words shot him in the foot.

"Microsoft's proposal significantly undervalued Yahoo!," Bostock writes, referring to the software giant's original $31-a-share offer. Ouch. If Bostock feels that $31 leaves Yahoo! "significantly undervalued," what does that say for his board's performance?"

"Our business is performing well as evidenced by our first quarter results," Bostock writes. Wellness is relative, I guess.

I certainly wasn't impressed by last month's report. Revenue inched just 14% higher during the period, and that was with the non-organic boosts provided by the company's many display-advertising acquisitions during the period. Other search-engine specialists like Google (Nasdaq: GOOG) and IAC's (Nasdaq: IACI) Ask.com are growing more quickly, at Yahoo!'s expense."

"I don't get it, Bostock. Perhaps this explains why you believe that the board is performing well. Maybe you shot yourself in the foot because you need new glasses. Those rose-colored ones just aren't working."

5/21 - "So what will happen with Microsoft and Yahoo!? Which platform will they use? How will they combine their technologies? How much will that cost?

With MSFT shares (at) $28, you just gotta ask, "Why would you care?"

Microsoft has plenty of money, and keep in mind they are one of the few 'tech' companies that pays a dividend every quarter. Masters, never bet against Carl Icahn, he will get Yahoo sold and Microsoft will buy them, it's a done deal."

"The Xbox got a significant market boost following the April 29 release of "Grand Theft Auto IV," which had the hottest debut in the history of video games. Gamer maker Take-Two Interactive Software sold 6 million units worldwide in the first week. The company makes versions for the Xbox and Sony's PlayStation 3.

Microsoft said on its Gamescoreblog last week that retailers reported that more than 60% of all GTA games sold in the first week were for the software maker's Xbox 360 video game console. This would lead one to believe that the remaining 40% were for Sony's PlayStation"

"Fellow Masters, to be against Microsoft is foolish, don't count them out because they haven't made Wall Street happy, they could buy Wall Street if they wanted to. Time will tell, but MSFT is a stock I would never place a short bet on, investors be warned."

5/19 - "At first I thought WTF? Has Microsoft become that impotent? The scoop is that Microsoft would work with Yahoo in some type of joint venture involving search advertising. It makes you to wonder what they have in mind. Joint venture? Transaction? Is this not a bad way to get into the search advertising field?

I decided to walk the dogs and think hard about this deal and what Microsoft has in mind. Then it struck me, that this situation is eerily similar to something that happened way back."

"...in 1992 (Microsoft) decided to form a partnership with Sybase and created a Microsoft SQL Server database based on IP from Sybase.In the beginning this venture seemed odd and only helped Microsoft to a degree.

What makes that situation similar to now is that Sybase like Yahoo is not king of the hill. Then it was IBM, and Oracle, now its Google. Then Sybase had good technology, but needed help, like Yahoo now. Then it helped Microsoft step into the SQL Database arena without costing billions. And now it would appear Yahoo can help Microsoft step into search advertising with a professional product.

The rest is history and now SQL Server is an extremely rock solid product that has the accolades from many in the industry. Looking at the deal from this light it actually is a win win for all parties concerned without having to go through a battle of control. Yahoo gets to keep its independence, and Microsoft gets technology it wants. Win win… If Microsoft stock sells off, consider it a long term buying opportunity."