Eric Savitz (Barron's) submits: The Street this morning is sorting out the implications of Microsoft’s (MSFT) decision to drop its offer for Yahoo (YHOO). The short version, as I noted earlier, is that this is excellent news for Google (GOOG), boosts the prospects for Time Warner (TWX) selling AOL, crushes Yahoo shares and gives a modest lift to Microsoft.
Yahoo CEO Jerry Yang is expected to spend some time with lawyers as the company likely will face shareholder litigation over the its opposition to doing a deal. Yang’s also likely to have some face time with Google CEO Eric Schmidt: There will be pressure on the company to do an outsourcing deal for search advertising to Google, although not everyone thinks this is a good long term plan, and it may not pass regulatory muster.
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