Today was the black Monday for Yahoo. After being unable to come to an agreement with Microsoft, their stock dropped significantly. A majority of yahoo shareholders were anticipating a buyout and it was that reason alone that the stock price was high. With that offer no longer on the table, the stock price of Yahoo dropped 14.65%.

Microsoft wanted Yahoo essentially for the page view, they want to expand their advertising side and need those page views to attract advertisers. There is not really any technology that Yahoo has in which Microsoft needs.

The coming few weeks will be very interesting for Yahoo, maybe not for their shareholders. If the stock price drops enough, it is possible that hedge funds could take Yahoo private. Other options include, an advertising deal with Google (this may go against monopoly regulations), merger with AOL or perhaps Microsoft will revisit the acquisition once the price has dropped enough.

No matter how you look at it, it is not a good time to be a Yahoo stakeholder. Jerry Yang will need to come up with something brilliant and fast.

If you liked this post, please subscribe to Money Management And You's RSS feed.

Filed under: Investments, Misc.