Since you read our Opening Bell entries, you will already be on top of the latest Microsoft Yahoo wrangling. Setting aside for a moment how desperate one has to be to run to AOL in search of a white knight, doesn't it also suggest a rather severe case of memory loss to think AOL might execute well on a merger? Or the construction of a ham sandwich? However you answer the question, it is into AOL's arms that Yahoo has flown.

You can call Steve "Eric Schmidt is a fucking pussy" Ballmer many things (sweaty, perhaps, rotund, for instance) but you can't call him a crafty negotiator on recent evidence. The decaying offer trick (for every hour after 3:00 pm that you delay, the Emperor Club credit portion of the deal is reduced by 10%) only really works in Michael Douglas movies, not with Yahoo directors. All that managed to accomplish, it seems, is to irritate Yahoo into baffling defensive maneuvering, specifically, a combination with special Olympic winner of the InterWebs, AOL.

Says the Journal: "The deal, which wouldn't include AOL's dial-up access business, would value AOL at about $10 billion." Estimates of the deal with AOLs dial-up access business included float near $7.2 billion.

Not to be undone, Ballmer has called for a Yahoo, News Corp, Microsoft three-way ("Arrgh! The goggles do nothing!") apparently on the theory that combining MSN, Yahoo and MySpace is a good idea. If Ballmer had consulted News Corp earlier, perhaps the "raise the offer in the face of resistance" strategy might have prevailed instead of turning the transaction into a bad scene from Three's Company. In fact, even the most basic review of this Q&A session would have provided some sound advice. (Substitute "Yahoo" in the place of "wife" and you've got merger and post merger integration advice that even BCG would be pressed to top).

News Corp, AOL Pursue Yahoo Deals [WSJ]