Microsoft Chairman Bill Gates told the press in Tokyo yesterday that the company “isn’t pursuing other deals following the withdrawal of its $47.5 billion takeover bid for Yahoo.” Their experience dealing with Yahoo, apparently, has put them off acquisitions altogether.
But wait. Just Monday Gates said “I wouldn’t rule out some partnerships but we don’t have anything imminent there” following a meeting and dinner with South Korean President Lee Myung-bak. In corporate-speak, that’s a pretty strong statement that Microsoft wants to buy some companies.
Did Microsoft change corporate development strategies from one day to the next? It appears they did. On Monday he says he wouldn’t rule out partnerships. Tuesday, no partnerships and a go it alone strategy.
What’s the real strategy? I can’t help but wonder if their key goal is to convince the market that they really don’t want Yahoo in order to drive their stock price down as far as possible. It’s clear that the markets still anticipate a deal with Microsoft, or possibly Google. It is currently trading at just under $26; analysts think its share price should be closer to $22.
If Gates is out telling the world, as he did on Monday, that they need to acquire other companies to fix their Internet strategy, it doesn’t take very long to figure out that there isn’t another Yahoo out there on the market. Microsoft has a long term problem on its hands, and Yahoo may be the only remedy. So when Gates says Microsoft isn’t pursuing deals, what I translate that to is “We really, really want to buy Yahoo.”
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