As we predicted months ago the Google’s deal with Yahoo is dead. Since it was never their intention to complete it is nothing to worry about for Google, but Yahoo’s Yang bet his stockholders equity on it. Now months later Jerry Yang admits the Microsoft deal is the best he could get. But Microsoft has gone stage left and whatever offer it may make will be far less than last spring.

Jerry Yang screwed his stockholders by pandering to the ego. His arrogant stand against a partnership or sale to Microsoft, who could use and expand the business, to become a special website in the Google adsense web farm affiliate program will now hurt the man who already cashed in his billion dollars of stock. Even more pain will come to investors who watched their investments cut in half.

Right now Yahoo trades at half what Microsoft offered last spring. Yang decided anything was better than a Microsoft sale and started shopping his company to find a value. It seems another bite your nose off to spite your face now that a short time has passed and the idiotic maneuvering that took place stands as the albatross it always was.

Microsoft is now firmly in the drivers seat and Yang is on his way to the gallows again. How long will investors allow the farce? Microsoft has no intentions of buying the now heavily damaged search engine and only rumors of its takeover spike the stock upwards. As Yahoo spirals ever downward you will see Yang increasingly begging for dollars. Look for Microsoft to offer under $20 a share for Yahoo after the New Year.