However I don’t think that applies here. if the board truly believed it, they would have sold the “pure Yahoo” piece to Microsoft for far more than $4.5B and spun out the Alibaba stake. They didn’t and ended up losing billions in shareholder value.
Occam’s razor would suggest that Microsoft and Yahoo’s exec teams both talking about the value of the Yahoo Internet services as the rationale for the deal probably is the truth. And Microsoft would have paid much more than 10% of the $45B to get it.
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Microsoft sees Yahoo as a way to compete with arch-rival Google Inc GOOG.O in the Internet search and advertising arena, but it has limits to what it is willing to pay to get a deal done.
“We’re prepared to move forward without a merger with Yahoo,” Ballmer said. “We think the best way to move forward quickly (and gain critical mass against Google) is to come together with Yahoo.”