1. Poor Management 101

Yahoo started off so strong. They started with the most dominant portal on the internet. They acquired a great suite of innovative web companies. They could not pull them together to create a compelling value proposition. This is what happens when management can't get their act together. The street gave them a lot of time; constantly giving them strong P/E multiples and always ready to bounce the stock price up on any hint of good news. But the benefit of the doubt doesn't last forever with Wall Street. This recent crash certainly indicated that Wall Street can't afford (or doesn't want) to have patience with Yahoo and the stock price dropped to $18.

2. The Good and Bad About Microsoft

Kudos to Microsoft for stalking its prey so patiently. They tried to be friendly and my guess is that the offer prices were higher than they are now. Now with the market down and Yahoo vulnerable, Microsoft sheds the friendly attitude and pounces of the straggling target. The bad news is this can be viewed as a confession by Microsoft that its web strategy is not working as planned.

3. Two Wrongs Don't Make a Right

Alright lets do the math. We got one company with a wealth of first rate web properties and an ineffective web strategy merging into another company with struggling web properties and an ineffective web strategy. Is there any more that needs to be said? And we haven't even begun to discuss the clash of cultures that would arise from a Micro-Hoo merger. Atleast, the will have a whack of cash to throw at their combined problems. That always work - doesn't it?