Why buy Yahoo now when you can keep saying you don't want to buy Yahoo and drive the stock down further? Heck, tomorrow, Steve Balmer should just say deal even for search is off the table. See what that does to the stock then.
Interestingly, Yahoo is not alone in being hammered in recent days. I've professed that I'm not stock guy. I suck at picking stocks but I can see Yahoo go even lower just because the economy simply isn't doing well and Yahoo investors trying to get out before the stock price goes even lower.
But Yahoo continues to be a premier brand as far as users are concerned. Excite? Infoseek? Lycos? Along with these three search engines, Yahoo helped usher in the Internet era but only Yahoo stands (I had picked Infoseek to remain an important part of the Internet). And with a big presence in mobile Internet, it stands to gain a lot because of its name recognition and services that just work.
Plus, Yahoo has a lot of International presence especially in emerging markets. Yahoo also has international partnerships that involve assets it owns.
So, if Microsoft is no longer interested in Yahoo, who would be rich enough to make a bid on Yahoo? Private equity? HP? Apple? A Chinese company?
Yahoo is getting cheaper by the day and someone will pull the trigger. Maybe everyone is waiting for it to go down a bit more yp see if they can snatch up the company at a price tag closer to $10 billion rather than the $20 billion right now. If someone like HP and Apple takes over Yahoo, they would be able to do it with cash and billions left to spare.
At the end of the day, Yahoo needs a direction. A vision. A takeover would be good in that sense. (I did not like Microsoft's takeover reasons. I think playing defense against Google will never work).
Impact: I think mobile warriors are not going to be affected by any kind of deal Yahoo makes. We may see some Yahoo services get gutted but Yahoo is already doing that on its own.
Another Note: Yahoo is set to make a decision within 6 months. Why so long?