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Union Square Ventures VC and blogger Fred Wilson doesn't think Yahoo would survive a Microsoft acquisition. "I suspect that many of Yahoo!'s best services will languish under Microsoft's ownership and that users will leave," Wilson writes on his blog. "It's happening already under Yahoo's ownership to services like Flickr and and MyBlogLog. It will be worse under Microsoft's ownership." Here's how he thinks Yang and Yahoo can wriggle out of Big Daddy Ballmer's bear hug.

  • Outsource search to Google. That will provide a 25 percent boost to cash flow according to Citigroup analyst Mark Mahaney. I have heard that this is worth about $10/share in Yahoo!'s stock price.
  • Dividend out to shareholders the interests in Yahoo Japan and Alibaba. They are worth $12/share according to the WSJ.
  • Split up the remaining company into several businesses which can be independent public or private companies. I would put Yahoo home page, search, My Yahoo, and email into one company and let that be new Yahoo. The other assets could be sold off or assembled into additional private or public companies.

Disgraced tech-stocks analyst Henry Blodget has another proposal: Have Microsoft take a 51 percent stake in Yahoo, but keep it independent.