Rupert Can't Save Yahoo!
Yahoo management and board are being grossly irresponsible. After screwing up the business for years, they're now turning down the only reasonable offer on the table in order to try and tie up with Newscorp? For what?
Yahoo! has some decent properties and gets a lot of eyeballs, but Rupert already gets a big share of those through existing deals. There simply isn't a ton of room in a tie-up for expanded horizons, and there's no way to shuffle the two together and cut the fat, something that desperately needs to happen at Yahoo.
Yahoo's margins are atrocious. Its returns on equity are atrocious. Its returns on invested capital are atrocious.
The only reason Mr. Softy is offering all that money is that it can (possibly) get a good return by reducing inefficiencies, cross-selling, getting a stronger position in paid ads, and linking together some of Yahoo's better properties (like flickr) with Microsoft's Live initiatives (maps, Xbox online, blogging, etc.) It's not a sure thing for Microsoft, but it's possible.
Rupert doesn't have the properties, projects, tech, or future plans to make a tie-in with Yahoo worth much. Yahoo! doesn't have the smarts or relevancy to survive without a bigger suitor.
Yahoo shareholders should be grabbing for torches and pitchforks and lining up outside Yang's house to have a bit of a talk with him -- and the rest of the board. Yahoo's executive suite is confusing hubris with conviction.