Parsing Yahoo! Part II: We Are Not Just Spinning, We Really, Really Mean It

SVI's Henry Blodget and Peter Kafka did us all a favor by quickly launching complementary pieces explicitly examining the spin dynamics of Yahoo's rejection of the Microsoft bid.

That's trouble for Yahoo! After all, it's bad enough having Jack Flack speculating on your leaks and parsing your language. (See the early equal-opportunity parsing of Microsoft, Google and Yahoo!) But when one of the primary drivers of the news coverage of your industry is doing it, you've already lost the spin game.

Why? Well, because once the story becomes about the spin itself, then the spin efforts are greatly undermined, and sometimes even become counter-productive. In other words, if you're reading about the spin in the coverage, then the spin probably isn't really working.

Blodget's dissection is thorough, and feels spot-on. Watch for the same sensibilities to creep fully into the mainstream coverage of the WSJ, NYT and the general business mags, with our own Portfolio.com already interpreting "What Yahoo's 'No' Means."

Even so, the short statement today from Yahoo! -- released to confirm yesterday's Journal leak -- still demands translation.

Yahoo!: Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet company,...

JF Translation: Remember, despite the ugliness of recent years, we are still a leading internet company, and there are very few alternatives out there. We are heartened by the fact that the next best option is AOL.

Yahoo!: ...today said the Yahoo! Board of Directors has carefully reviewed Microsoft's unsolicited proposal with Yahoo!'s management team and financial and legal advisors...

JF Translation: We read the whole document. We're not panicking. We repeat -- We are NOT panicking!

Yahoo!: ... and has unanimously concluded that the proposal is not in the best interests of Yahoo! and our stockholders.

JF Translation: It's not about our personal dislike of Microsoft. It's about extracting maximum value out of a bad situation.

Yahoo!: After careful evaluation, the Board believes that Microsoft's proposal substantially undervalues Yahoo!...

JF Translation: We hate the idea of selling to the devil, but we believe the devil is ready to pay through the nose.

Yahoo!: ...including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments.

JF Translation: ... and did we mention Jerry Yang's vintage lunch box collection?

Yahoo!: The Board of Directors is continually evaluating all of its strategic options in the context of the rapidly evolving industry environment...

JF Translation: We hope the "rapidly evolving industry environment" produces a decent alternative... or at least one credible enough for Ballmer to pay $38, uh, we mean $40 a share.

Yahoo!: ...and we remain committed to pursuing initiatives that maximize value for all stockholders.

JF Translation: Our decisioins will have nothing to do with our own personal pay-outs.

Yahoo!: Goldman, Sachs & Co., Lehman Brothers and Moelis & Company are acting as financial advisors to Yahoo!. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to Yahoo!, and Munger Tolles & Olson LLP is acting as counsel to the outside directors of Yahoo!.

JF Translation: Lashinsky may say we're the junior varsity, but at least we're savvy enough to hire people who know what they're doing.

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