Yahoo Shares Drop as Microsoft Merger Melts

Yahoo shares opened this morning at $23.02, down $5.65 from yesterday's close. However Yahoo has bounced back a bit to just under $25 per share at 1pm, perhaps reflecting investor's optimism that a deal will still be struck with Microsoft after what some - including me - think was a case of MS CEO Ballmer calling Yahoo's high price bluff.

Jerry Yang wrote investors and the public today at the Yahoo Andecdotal blog in a post titled "OK, so now what? There he writes:

We’ll continue to execute on our plan — making your Internet experience as personal, relevant, open and social as possible, serving advertisers so well they insist on working with us, and opening up Yahoo! in a way that developers dream of. And, we’ll also continue to pursue strategic opportunities that position us for long-term success.

Jerry also appeared to be doing a bit of covering Yahoo's butt in what is likely to be a spate of shareholder lawsuits suggesting Yahoo should have sold the company at the price offered:

Frankly, there’s a lot of nonsense and misinformation in what’s being reported. Just so we are all clear, here’s what happened. The board took its mission very seriously. We clearly indicated to Microsoft that we were open to a transaction but only if it were on terms that fully recognized the value of Yahoo! and was in the best interests of our stockholders.
No one is celebrating about the outcome of these past three months… and no one should.

But wait ... didn't somebody hear a champagne cork pop at Jerry's house? His statement does not really jive with the open letter from Steve Ballmer or the rumor mill where it has been strongly suggested that Yahoo was a lot more interested in killing this deal at all costs than compromising in any reasonable way.

Disclosure: I am (still!) long on YHOO