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Saying boo to Micro-hoo: Eric Auchard

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Eric AuchardLONDON, July 29 (Reuters) – There’s been a bonfire of shareholder value at Yahoo and the blaze is not out yet, even after the agreement to a long-delayed deal with Microsoft.

Eighteen months ago, Yahoo walked away from Microsoft’s nearly $45 billion acquisition offer — a 60 percent premium to Yahoo’s then market value.

Fast forward to today and there is a zero premium being offered by Microsoft. And that’s after Yahoo also spurned $9 billion from Microsoft to buy just Yahoo’s search business. Still, investors had been hoping Microsoft might pay at least $1 billion in up-front cash to Yahoo.

No chance. Instead, Yahoo is receiving face-saving revenue guarantees for search advertising sold on Yahoo’s own sites for the first 18 months after the Microsoft deal takes effect.

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