Parsing Ballmer-to-Yang: See You Again Real Soon, Buddy.

Wow, Steve Ballmer walked.

Based on the recent posturing, Jack Flack could just smell it coming, and even offered Yahoo founder Jerry Yang a Rescue Memo in advance of Microsoft's withdrawal of its sweetened bid. Capping a war of words that was starting to feel like a good HBO series, Ballmer sent Yang what will become one of the least private letters in the history of commerce. It, of course, demands a flack's interpretation for full understanding.

Ballmer: Dear Jerry:

Translation: I'm pinning this on you personally. Not your board. Not Bill Miller. You!

Ballmer: After over three months, we have reached the conclusion of the process regarding a possible combination of Microsoft and Yahoo!.

Translation: This is the letter you've been waiting for. Try not to quiver.

Ballmer: I first want to convey my personal thanks to you, your management team, and Yahoo!'s Board of Directors for your consideration of our proposal.

Translation: I want to do a monkey dance on your neck, but instead I'm going to demonstrate civility. I want to come off as the rational one in this thing.

Ballmer: I appreciate the time and attention all of you have given to this matter, and I especially appreciate the time that you have invested personally.

Translation: Let the record show that you personally have been highly involved in the failure of this deal.

Ballmer: I feel that our discussions this week have been particularly useful, providing me for the first time with real clarity on what is and is not possible.

Translation: I didn't understand just how irrational you were until I saw it with my own eyes.

Ballmer: I am disappointed that Yahoo! has not moved towards accepting our offer.

Translation: There will be blood.

Ballmer: I first called you with our offer on January 31 because I believed that a combination of our two companies would have created real value for our respective shareholders and would have provided consumers, publishers, and advertisers with greater innovation and choice in the marketplace.

Translation: Together we had a chance. And the regulators would have approved it.

Ballmer: Our decision to offer a 62% premium at that time reflected the strength of these convictions.

Translation: SIXTY-TWO PERCENT! SIXTY-TWO PERCENT! You and your shareholders will never in your lives see SIXTY-TWO PERCENT on your own.

Ballmer: In our conversations this week, we conveyed our willingness to raise our offer to $33.00 per share, reflecting again our belief in this collective opportunity.

Translation: We swallowed our pride, assuming you would do the same.

Ballmer: This increase would have added approximately another $5 billion of value to your shareholders, compared to the current value of our initial offer. It also would have reflected a premium of over 70% compared to the price at which your stock closed on January 31.

Translation: I wanted your shareholders' lawyers to be able to paste this sentence into their complaints.

Ballmer: Yet it has proven insufficient, as your final position insisted on Microsoft paying yet another $5 billion or more, or at least another $4 per share above our $33.00 offer.

Translation: You purposely chose a threshold you knew we would not cross. We're nutty-obsessive, but not that nutty-obsessive.

Ballmer: Also, after giving this week's conversations further thought, it is clear to me that it is not sensible for Microsoft to take our offer directly to your shareholders.

Translation: The vote count was iffy. Your big shareholders assumed we wanted you so badly that we would go to at least $35.

Ballmer: This approach would necessarily involve a protracted proxy contest and eventually an exchange offer.

Translation: I'll let you be the one with the word "pyrrhic" permanently embedded in your biography.

Ballmer: Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo! undesirable as an acquisition for Microsoft.

Translation: You waved a detonator in my face, and said you'd rather destroy your creation than let me have it.

Ballmer: We regard with particular concern your apparent planning to respond to a "hostile" bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo! today.

Translation: A phalanx of lawyers is marching out of Redmond tonight.

Ballmer: In our view, such an arrangement with the dominant search provider would make an acquisition of Yahoo! undesirable to us for a number of reasons:

Translation: We've got a great case.

Ballmer: First, it would fundamentally undermine Yahoo!'s own strategy and long-term viability by encouraging advertisers to use Google as opposed to your Panama paid search system. This would also fragment your search advertising and display advertising strategies and the ecosystem surrounding them. This would undermine the reliance on your display advertising business to fuel future growth.

Translation: Wow, you really would rather kill it than sell it.

Ballmer: Given this, it would impair Yahoo's ability to retain the talented engineers working on advertising systems that are important to our interest in a combination of our companies.

Translation: Most of them probably aren't interested in fetching the cigars and slippers of their Google counterparts.

Ballmer: In addition, it would raise a host of regulatory and legal problems that no acquirer, including Microsoft, would want to inherit. Among other things, this would consolidate market share with the already-dominant paid search provider in a manner that would reduce competition and choice in the marketplace.

Translation: We smell a great opportunity to get the Google anti-trust snowball rolling.

Ballmer: This would also effectively enable Google to set the prices for key search terms on both their and your search platforms and, in the process, raise prices charged to advertisers on Yahoo. In addition to whatever resulting legal problems, this seems unwise from a business perspective unless in fact one simply wishes to use this as a vehicle to exit the paid search business in favor of Google.

Translation: You've given up on search.

Ballmer: It could foreclose any chance of a combination with any other search provider that is not already relying on Google's search services.

Translation: Poison pills generally include poison.

Ballmer: Accordingly, your apparent plan to pursue such an arrangement in the event of a proxy contest or exchange offer leads me to the firm decision not to pursue such a path.

Translation: We've decided a "surge" doesn't make much sense.

Ballmer: Instead, I hereby formally withdraw Microsoft's proposal to acquire Yahoo!.

Translation: I hereby formally pass to you the privilege of being second-guessed forever.

Ballmer: We will move forward and will continue to innovate and grow our business at Microsoft with the talented team we have in place and potentially through strategic transactions with other business partners.

Translation: We will be courting the same players you will, and we will gladly over-pay enough to force you to do something really stupid to get a deal done.

Ballmer: I still believe even today that our offer remains the only alternative put forward that provides your stockholders full and fair value for their shares.

Translation: May the lawsuits take every nickel you have.

Ballmer: By failing to reach an agreement with us, you and your stockholders have left significant value on the table.

Translation: And we will buy you for $19 a share before the NBA play-offs are over.

Ballmer: But clearly a deal is not to be.

Translation: Until your shares crash below $15.

Ballmer: Thank you again for the time we have spent together discussing this.

Translation: I'm glad I got to see for myself the denial that was in your eyes.

Ballmer: Sincerely yours,

Translation: I'll be stalking you in the afterlife.

Steven A. Ballmer, Chief Executive Officer, Microsoft Corporation