Granted, we’re not big Yahoo fans here at digitalmissive - at least not of Yahoo! Mail: recently, several years’ worth of email was lost from Andreas’ personal account, and since early 2007, the search function on mine started returning messages only from the last month or so.   Yahoo’s response to both issues was of the “Known-Issue,-Our-Engineers-Are-Aware-Of-It” variety, but both issues have remained unresolved over the past few months.

Concurrently (as you might have heard), things have gotten a bit bumpy around here economically lately - but for Yahoo the news has been even worse: in October, the company announced the intended layoff of 10% of their workforce by year’s end,  and after turning down a buyout offer from Microsoft earlier this year at $31 per share, today the company’s stock dipped below $10.

Perhaps to entice Microsoft to make another offer (and perhaps to avoid submitting himself to what would’ve been a memorably contentious 2009 shareholder’s meeting), in November CEO Jerry Yang agreed to step down once a replacement can be found.   But despite the imminent departure of the initial $31 offer’s main opponent, and despite Yahoo’s obvious (if somewhat humiliating) interest in winning back the software giant’s affections, Microsoft has not been enticed to return to the table with a reduced offer.

Most recently, Yahoo Senior VP Toby Coppel (head of operations in Europe and Canada) has announced his departure from the company as well (although Yahoo insists Coppel’s decision is unrelated to Yang’s departure and Microsoft’s lack of renewed interest).  While I was admittedly frustrated with Yahoo Mail, it is with no schadenfreude that I witness the company’s troubles - especially not for the 1000+ Yahoo employees to be let go by 2009.  But it is interesting to note that how well a company executes on the small stuff (such as the mail accounts of two guys from New York) often has a way of being predictive of its longer-term prospects.

It’s not clear whether Microsoft’s apparent disinterest in Yahoo is genuine or whether it’s a tactical stance given Yahoo’s continually weakening negotiating position – but either way, as unhappy as Yahoo shareholders must be these days, Microsoft owners should be showing Steve Ballmer the love for walking away at $31…