Yahoo says no to Microsoft: what's next?

News of this has just come down, less than 1/2 hour ago: that the Yahoo! Board of Directors

Seems as though they would take nothing under $40.

The point now is, how did Yahoo!'s stock get so low that a company takeover could be within the means for Microsoft, News Corp., or even a private equity consortium to pull off?

I have to blame some of this predicament on the same Board of Directors.

Although the Board is not entirely constituted now as it has been, they erringly countenanced the hiring and regime of Terry Semel.

Terry was and is an old-style Hollywood dealmaker. He didn't seem to understand the critical imperative of pouncing on available, revenue-enhancing Internet properties such as YouTube and Facebook.

People such as Terry are more oriented toward due diligence when these acquisition opportunities come up. That is advisable in the cinematic world, but not in the world we Internet types inhabit.

He never got that, and the Board and founders (Jerry Yang and David Filo) frankly let him waddle around too long.

Meanwhile, the broadband content deals Semel did pursue and pull off were not transformative for a company competing against the freewheeling, risk-taking culture of Google.

So the takeaway here is that a calcified company such as Yahoo! has been losing on so many fronts to a non-calcified, non-bureaucratic company such as Google.

And the circumstances of all this misprioritization, analysis-paralysis and all is that the stock has dipped to a place of takeover vulnerability.

I don't see MSFT bidding at $40, no. $35 maybe, but no higher.

What do you think will happen?