Don't Yell 'Yahoo!' So Fast

If Microsoft and Yahoo CEOs accidentally meet in the same trade show bathroom and say "Hello" to one another, have they renewed merger talks?

Need I answer?

Yesterday's renewed Microsoft-Yahoo merger rumor, spurred on in part by TechCrunch's Michael Arrington and debunked today by BoomTown's Kara Swisher, is ridiculous.

I didn't blog the rumor earlier because I didn't believe it, and the major blog reporting the renewed talks has an increasingly bad record for accuracy, recently anyway. TechCrunch is doing a good job of seemingly rushing to be first to blog before checking accuracy. I would be more understanding if there were retractions or corrections.

I suppose Kara could be wrong, except that her reporting on the Microsoft-Yahoo merger has been outstanding and TechCrunch gaffes have me questioning most every post. Anybody recall last month's fake Windows 7 screenshots blasted out to the world as being real? They weren't. There are plenty other examples, but that's the best other Microsoft-related one that comes immediately to mind.

As someone who worked as a lawyer, Michael should know something about negotiating tactics or leaks used as a means of manipulating share prices.

Joe's rules for interpreting negotiation rumors:

1. Nobody talks.

2. Nobody talks.

3. Nobody talks.

4. An associated party only talks when the negotiations aren't going well and one side or the other wants to influence the discussion or end it.

5. Disassociated parties talk when they have another agenda, like influencing stock price of one or both companies.

Nobody talks unless they want something, which makes what they say susceptible. And there is someone here with a really big agenda, billionaire businessman Carl Icahn, who has waged a proxy fight to oust some Yahoo board members, starting with CEO Jerry Yang. Then there are other shareholders disgruntled with Yahoo. Other parties might want to boost Yahoo shares, which recently nipped $20 in their downward spiral. With so many people with possible interest in influencing Yahoo, any unnamed source's reliability should be questioned.

Michael wrote today:

"We've got multiple sources at both Yahoo and Microsoft telling us that official talks are back on between the two companies. But we're hearing something different than CNET—the talks are about a full buyout again, not a sweetened search-only deal."

To his credit, Michael did update the story as new information emerged, but much of it came from other news services. But unnamed sources are the worst kind for a story about the possible merger of two public companies that are hugely influential in their respective market segments.

By the way, at least CNET News.com identified a "major investor who has been in contact with both parties" as a source. But a major investor is a weak source, given the potential conflict of interest here.

Kara wrote yesterday:

"You did not hear it here first, because BoomTown suddenly got the exact same calls too yesterday—coincidence? I think not!—from 'sources' touting Microsoft-Yahoo as 'back on.' I simply could not confirm it to our site's standards of reporting. Which is to say, aiming for trying to report with full accuracy versus repeating errant chatter that is so typical now in this deal."

A Microsoft-Yahoo merger could yet happen. In fact, I detect some desperation on the part of Yahoo. It wouldn't shock me if it was Yahoo banging on Microsoft's door and being rebuffed, in an interesting role reversal. But that's my conjecture. I don't have and wouldn't use unnamed sources about renewed Microsoft-Yahoo talks.