• Silicon Alley Insider, Thursday, February 14, 2008 10:45 AM

The chances of Yahoo accomplishing a Micro-hoo alternative are slim, which means that Yahoo is simply floating these alternatives to get Microsoft to up its $31 per share bid to $35.

Microsoft, however, also has alternatives, which is important because many of the company's shareholders hate this deal. They are: walk away completely, walk away from Yahoo and buy Facebook instead, refuse to raise its bid, or get CEO Jerry Yang and the rest of the board fired. That any of these options are open underscores the fact that Microsoft has the advantage with this one and needn't raise its bid a penny.

Silicon Alley thinks option one is the best course of action. He warns that the pending Micro-hoo "disaster" will be CEO Steve Ballmer's "entire legacy", and says that walking away from the Yahoo deal (representing the Web's past) in favor of Facebook (its future) might be smarter. If nothing else, it would validate Facebook's ridiculous $15 billion valuation.

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