CyberTech Rambler

December 4, 2008

Jerry Yang gambled and lost, but it was a war well fought

Filed under: Uncategorized — ctrambler @ 4:39 pm

We all know Google-Yahoo! deal falls through. Although we did know that it is due to regulatory concerns, latest information suggests that both Google and Yahoo! fought to the bitter end and only quit when it was clear that it is not in the interest of both parties to proceed. According to Nate Raymond, they abandoned the deal hours away from DoJ filing an anti-trust lawsuit. This is a lawsuit where both Google and Yahoo! will lose whatever the outcome. At that stage, there was no choice but to abandon the deal.

If true, Google and Yahoo! should had disclosed this information early on. The original announcement of the abandonment of this deal make it looks like Google chickened out. This new information says Google held out to the bitter end. While the outcome would had been the same, it makes a different on my view on the gamble Jerry Yang’s took in rejecting Microsoft’s takeover offer.

If Google had chickening out, Jerry Yang’s has to shoulder almost all of the blame for rejecting Microsoft’s offer. He had chosen the wrong partner to fight a war. That makes his decision to fight Microsoft looks reckless.

However, if Google held out to the bitter end, Jerry Yang’s share of blame decreased as he had chosen the right partner. The breakup of the deal was something beyond his control. One can say he was, quite simply, dealt a bad card.

Would this had saved Jerry Yang’s CEO carreer? No. We all know if the gamble failed, Yang had to go whatever the reason. It’s about taking responsibility for one’s action. Losing so much money for the shareholder is not something any shareholder will be willing to forgive. Nor should they.

As for Microsoft lobbying against the deal, nobody would be surprised. Anyone in Microsoft’s shoe would had done the same. Did the lobbying affected the deal? I am not sure. Without Microsoft involvement there is still a high chance that the deal will not go through, that’s why I call it a gamble.

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