Microsoft, Yahoo and money

To the intense joy and considerable surprise of just about everyone, the MS/Yahoo deal is not going to plan.

Yahoo has played it cool - the rumour is that the board will say no, but they're in no hurry to play their hand. And why would they, when every day they tarry hurts Microsoft more and more?

It's real hurt too - as TechCrunch relates with relish, MS' value has declined by around $40 billion since the offer was made, as people offload the stock. Meanwhile, Yahoo's value has grown - when there's an offer on the table for a company then that's a solid valuation, and the stock will go there. That's why you agree deals behind the scenes and announce them: the very act of an offer changes the numbers.

So now we have a much more expensive Yahoo, and a Microsoft offer that's already cost as much as was on the table. Plus, since half the offer was in stock, and that stock's now worth a lot less, a lot more Microsoft is on offer - with a further depressive effect on the stock price.

I'm sure Microsoft's announcements at 3GSM/Mobile World Congress will sort that out, though! See you there.