Yahoo! (YHOO): The Enemy Of My Friend Is My Enemy? (MSFT)(GOOG)

“It’s discouraging to think how many people are shocked by honesty and how few by deceit.”–Noel Coward

When Yahoo! (YHOO) tried to run away from a buy-out offer from Microsoft (MSFT), it sought comfort in the arms of Google (GOOG). Perhaps the two could form an alliance and the world’s largest search company could provide services to the second place company. Analysts said Yahoo! could make hundreds of millions of dollars by letting Google have the business. The move was effective in making Microsoft think twice about its offer.

But, then Microsoft just rode into the sunset.

It now turns our that Yahoo! had been bad-mouthing a deal just before Redmond came a-calling.

According to a report by Reuters, court papers show that "Yahoo Inc executives dismissed a search-advertising deal with Google due to antitrust concerns, one day before Microsoft Corp made its takeover offer earlier this year."

So, as it turns out, Yahoo! agreed with Microsoft’s later claim that having the No.1 and No.2 search companies hook up might be a problem for The Justice Department. Beyond that, Yahoo! viewed its potential alliance with Google as a chess move, but not the end of the game.

The news is yet another example of how badly Yahoo! has handled its M&A challenge. Google has seemed cool to a partnership with Yahoo!. Is is any wonder now that it is clear that it was only being used?

The only justice is that Yahoo!’s board and management are left holding the bag.

Douglas A. McIntyre