Is Yahoo dead?

Thanks to the DOJ, Google has backed out of its partnership with Yahoo -- leaving the No. 2 search company dangling helplessly over the jaws of Microsoft. Can it survive?

The problem with writing about the endless Microsoft-Yahoo-Google mini-series is eventually you run out of metaphors. So I'll quote Michael Corleone: "Just when I thought I was out, they pull me back in."

Google has bailed on its bailout of Yahoo. After 7.5 years of near total stasis, the US Department of Justice's anti-trust division emerged from a persistent vegetative state to declare that a Google-Yahoo partnership will not stand. Why this particular battle roused US anti-trusters from their dirt nap is a mystery. But it was enough to scare off the Googlers.

(An alternate theory holds that this is what Google intended all along: to throw a cluster-FUD bomb into the Microsoft-Yahoo merger, giving them time to put even more mileage between themselves and the also-rans. Not evil per se, but very very sneaky.)

So what options does Yahoo have now? To go running back to the lout that dumped them six months ago.

Quoth Jerry the Yang at the Web 2.0 summit:

"To this day, I have to say that the best thing for Microsoft to do is to buy Yahoo. I don't think that is a bad idea at all -- at the right price, whatever the price is, we are willing to sell the company. We were ready to negotiate, we wanted to negotiate a deal, and we felt that we weren't that far apart. But at the end of the day, they withdrew and they since have been very clear about not wanting to buy the company."

I don't know what's worse. The prospect of watching Redmond slowly replace every good Yahoo product with a mediocre Microsoft one, or the sight of Yang hiking up his skirt and saying, "Whoo-hoo, sailor, over here" to Steve Ballmer.

Yahoo's stock, which spiked to around US$30 after Microsoft's original offer, is now trading in the low-to-mid teens. So this is not what you would normally call "bargaining from a position of strength." It's more like ...

a) Sauntering into the tiger cage wearing a lamb-chop necktie

b) Jumping into a shark tank with a splash of Eau de Chum behind each ear

c) Stuffing your pockets with Oreos and going on Oprah

or

d) All of the above.

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Robert X. Cringely

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