CNNMoney.com: Yahoo Gets Desperate

Paul R. La Monica, CNNMoney.com editor at large, offers up a scathing commentary of Yahoo’s dwindling options in the face of their defiant refusal of Microsoft’s $44.6 billion takeover bid.

“Not only has the company turned down Microsoft’s takeover offer, but according to a report in The Times of London Monday, Yahoo is said to be considering re-entering talks with my parent company, Time Warner, to buy AOL,” La Monica writes. “It’s reasonable for Yahoo to try and extract a higher bid from Microsoft. This isn’t like the News Corp.-Dow Jones takeover bid when Rupert Murdoch offered a price for Dow Jones that the stock hadn’t traded at in more than five years. But the thought of Yahoo trying to merge with AOL just smacks of desperation.”

La Monica makes the entirely reasonable argument that rather than improving Yahoo, a buyout of AOL is “merely a 2008 version of the old 1980s style of scorched earth takeover defenses.” In other words, if Yahoo is already struggling against Google, buying a portal that’s struggling even more isn’t going to help the situation. The whole thing, along with the Microsoft takeover refusal, just reeks of a desperate ploy to get Microsoft to offer more money. We’ll see if it works.

Yahoo gets desperate [CNNmoney.com]