Yahoo!

Yahoo shareholders enjoyed a wild ride today, albeit not as terrifying as it might have been. After bidding good riddance to Microsoft’s withdrawn buyout offer, Yahoo’s stock collapsed today, opening today near $23 (more than $4 lower than where it closed Friday) before recovering slightly below $25, down 15%. That the stock finished as high as it did is attributed to the belief that Microsoft will eventually make another offer. However, this being the USA, contingent fee lawyers are already preparing lawsuits against Yahoo management for refusing the offer.

For someone who played so much poker at Harvard, Steve Ballmer comes across as a terrible strategist — threatening to lower the price before raising it. No wonder employees, shareholders, Yahoo and analysts couldn’t figure out what he was up to.

Among all the coverage I saw today, I liked best the six minute video interview with analyst Henry Blodget — who (with good humor) noted that Ballmer cannot be simultaneously criticized for bidding too much at $31 and then for being too cheap to raise the price. Ironically, I found it on Yahoo Finance.

Blodget encouraged Microsoft to focus on its core business of operating systems and applications, not obsessing over its search rivalry with Google: “That’s what Steve should be focusing on, not trying to win a game he’s already lost.”