Kara Swisher

Recent Posts by Kara Swisher

With the Yangtanic Sunk, What Is Microsoft Trolling For Now?

Well, for sure, Microsoft execs were not doing high-fives after Yahoo CEO Jerry Yang said he was stepping down yesterday, as Yahoo searches for a new CEO to take over.

Well, maybe some small and discreet ones.

That hand-slapping, of course, was the delightful tidbit from the New York Times after Microsoft (MSFT) dropped its takeover bid for Yahoo (YHOO) earlier this year.

The story: Yahoo execs were reportedly high-fiving each other in celebration for not taking $31 a share from the software giant. Today, of course, Yahoo stock has been halved.

Which has long begged the question why Microsoft CEO Steve Ballmer has persistently–almost obsessively, really–not gone back and made another bid for Yahoo at discount prices.

Well, simply put, he does not want Yahoo whole and still doesn’t want it, even with Yang’s departure.

While many like to gin up a “Dynasty”-style feud between Yang and Ballmer–as if they were Alexis and Krystle cat-fighting in a fountain–that was never true, and Yang’s moving on will not change the equation that much.

Of course, Microsoft execs were burning up the phone wires down to Silicon Valley yesterday trying to make sure it is well positioned to make the deal it does want: A sweeping search and search-advertising partnership with Yahoo, whose similar deal with Google (GOOG) recently collapsed.

“They are ready to move, as soon as it becomes clear who is in charge at Yahoo,” said one source close to the situation. “They don’t want to appear too eager, but also don’t want to lose this one.”

Indeed, Microsoft is now in a good position to wait and swoop, one of its more effective tactics. Not that its consumer-facing digital strategies have been very successful thus far, and it definitely bollixed the Yahoo takeover attempt.

But the software giant has shown it can be more than willing to fork over way too much payola to try to catch up with its archrival Google in the search game at companies like Facebook and, more recently, Verizon (VZ).

While a deal with Yahoo will not bring Microsoft in even close range of Google, it is a deal that is most likely to be done, given the pressure on Yahoo now.

While a large group of execs at Yahoo still maintain that separating search and the company’s other businesses is dangerous to its future, it is hard to imagine its board will pick a new CEO who is not more than willing to travel to Microsoft’s Redmond, Wash., HQ and make peace pronto, and do a deal.

High-fives, all around, everyone?

Please see this disclosure related to me and Google.