In these eBay days, buyer's remorse is increasingly common. Less common is the remorse of the unbought — a sensation now widely reported among major Yahoo shareholders in the wake of Ballmer's retreat. The hostile takeover bid never materialised, Yang never gave in, and Microsoft never had to check behind the sofa for that little bit extra.
The shareholders are left dreaming of what might have happened with just a few dollars more.
If you believe, as we do, that a combined Microsoft-Yahoo would have exhibited the worst attributes of both companies, then such remorse is unfounded. The failure of the takeover is the best possible result — for both companies, and the industry as a whole. There will be some shareholders who lose out, certainly in the short term: otherwise, it's a lucky escape.
In particular, Microsoft should realise how close it came to tying up management bandwidth and company resources in a year-long forced wedding with no long-term upside, ask itself how it came so close to disaster, and use that realisation to come up with a new strategy. Take a look at what customers want and think of new ways to please them, instead of aping other people's success. No amount of Zune will make Microsoft an Apple, no number of Xboxes will make it a Sony — and no matter how expensive Yahoo was, it wouldn't make Microsoft a Google.
Microsoft doesn't need to be any of these companies: those positions are already taken. It needs to find new ways of thinking, demonstrate initiative and imagination, show some hunger and verve. It has 40-odd billion in the bank. It can build anything it wants to, on the web or off it. When was the last time that Microsoft's thinking made anyone go "Wow!" — in a good way? (Ray Ozzie's cloud gets an exemption, at least until the company finds a way of explaining what it is and why it matters.)
And if Microsoft looks inside itself and can't find any of the above, then it's time to accept that from the top down, its current batch of leaders do not have what it takes and are no longer fit for purpose. It was this suspicion that led Yahoo to instinctively recoil, and made so many commentators regard the deal as, at best, a holding exercise in ad revenue numbers — at worst, a crippling vote by Microsoft against itself as a genuine innovator in technology.
Without a success in the near future, such suspicions will harden into certainty. Change is coming to Microsoft: the company merely has to decide what form it will take.