With limited options, Yahoo board members face increased pressure to accept Microsoft's hostile bid. Yahoo has resisted Microsoft's advances in the past, convincing shareholders a turnaround was just around the corner.
So how much money did Yahoo leave on the table by declining the earlier offer? Microsoft won't publicly reveal the bid. Yahoo CEO Jerry Yang would be loath to share the offer from the company the Valley loves to loathe.
Here's the rumored Microsoft bid made last year: $40 plus per share. That's the number Oppenheimer analyst Sandeep Aggarwal cited in a note to clients, suggesting a potential 26-40 percent upside for investors from the current offer of $31 per share - if Yahoo can negotiate a better deal for its shareholders or find a more suitable suitor.
So who's willing - besides Google - to play white knight to Yahoo's digital damsel in distress?
The knights hardly comprise a round table. Only five companies have been widely reported as possible suitors: AT&T, Comcast, News Corp, Time Warner, and Verizon Communications. None has stepped up to enter the fray. Rupert Murcoch of News Corp publicly stated he didn't plan to prepare a competitive bid.
The Wall St. Journal (subscription) reported this morning that Yahoo's hoping against hope that a rival bidder or a business tie-up with Google would save the day. Google desperately wants to derail the deal, even though their share of searches continue to erode Yahoo's market share.
Mike Arrington of TechCrunch expects shareholders to approve the deal soon.
A Google-Yahoo partnership, though, isn't an ideal solution for Yahoo either. It's not as if Google could sign a noncompete agreement with Yahoo in lines of business Yahoo has strength in: local mobile, e-mail, display advertising, or e-mail.
How much revenue Google would be willing to forego by partnering with Yahoo in search also remains in question. In its quest to index the world's information, Google has become a victim of its own success.
A grizzly bear hug (not even a teddy bear hug) from Ballmer may have squeezed the life from Silcon Valley's once and future king.
Now it seems Google's mouth-to-mouth resuscitation of Yahoo's search business will be the only hope for Yahoo's survival.