Jennifer B. Davis

It appears that Yahoo, Inc. has enacted some new severance policies (which seem very ambigous and open to wide interpretation). For instance, they allow people severance if they quit for "good reason," whatever that means. I can't help but think that this might bite struggling Yahoo, if Microsoft loses interest in their take-over bid.

I am not often sympathetic with Microsoft (as they are big boys with lots of cash and power), but as someone who has done M&A work, I feel for them. They make a public bid for Yahoo, see the value of their company drop $4 BILLION dollars in market cap (in a deal that is in part based on stock), and then see the forecasted costs of integration climb as Yahoo does stunts like this. In addition, Yahoo has lost some of their senior engineers in the past week (when Bill Gates goes on record saying that is the value that they are buying). Microsoft meanwhile hires a firm to oust the Yahoo board and appeal to shareholders directly.

People say that buying a company (especially a company dependent on intellectual property) is like buying a greenhouse. The conditions are sensitive and the actions must be delicate to keep the conditions right for growing stuff. In this case, Microsoft is messing with the thermostat and Yahoo is breaking the greenhouse windows from the inside. I fear that the plants are going to die.

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