In the wake of the collapse of Microsoft's efforts to acquire Yahoo on account of Yahoo's demanding up to $37 per share, Yahoo's largest shareholder has expressed outrage at Yahoo's management. Reuters reported, "Legendary media money manager Gordon Crawford blasted Yahoo Chief Jerry Yang for blowing the Microsoft deal... 'I am extremely angry at Jerry Yang and at the so-called independent board,' Crawford told the Times. 'I’m hoping that there is such an outpouring of outrage that the board is embarrassed into revisiting this thing … but I’m not optimistic about that.'"

Today, Yahoo's stock has been trading higher. Whether or not that trend has something to do with expectations that the reactions of Yahoo's shareholders might lead to Microsoft's re-entering the bidding process for Yahoo remains to be seen. In my opinion, there remains just such a possibility at some point in time, though such an outcome is not assured.

The discontent of Yahoo's shareholders has provided Microsoft with a stronger bargaining position and an increased prospect of receiving a favorable response from Yahoo's management. Hence, it may well be able to extract a more favorable price from Yahoo's management, perhaps something closer to its initial offer of $31 per share than its $33 per share closing offer, should discussions resume.

Originally Posted by rathi There would have been little point in the buyout. Microsoft has absolutely no skill at all in dealing with the internet. MSN is an expensive joke. The only useful thing they could do would be to make Yahoo the default search engine on Internet Explorer. Yahoo couldn't even use Microsoft's obscene amounts of cash to have a chance against google in the search market, given the non-traditional marketplace.

In the wake of Microsoft's abandoning its bid to acquire Yahoo, it appears that Yahoo is in discussions with Google to deepen its recent collaboration in advertising with that company. CNN reported:

Google Inc.'s top executives on Thursday expressed hope that the Internet search leader will be able to form a potentially lucrative advertising partnership with Yahoo Inc. - a deal that would lower the odds of Microsoft Corp. renewing its attempts to buy Yahoo.

"We have been talking to Yahoo and we are very excited to be working with them," Google co-founder Sergey Brin told reporters before the company's annual shareholders meeting. "We share a lot of values with them."

Today, Microsoft opened the proverbial door, at least a little, to renewing its efforts to acquire Yahoo. Bloomberg.com reported:

Microsoft Corp. said it may renew talks for a transaction with Yahoo! Inc. if Carl Icahn succeeds in replacing the board, throwing its weight behind the billionaire investor's fight for control of the Internet company.

Microsoft said it might try to buy the search business or the whole company, pushing Yahoo's shares up as much as 12 percent. Microsoft has been in talks over the past week with Icahn, who controls about 69 million Yahoo shares, or about 5 percent.