Beware Microsoft's Mistake: Looking Desperate

CHICAGO -- You remember that old dating wisdom about playing hard to get? Turns out it might apply to the business world, too.

Consider Microsoft (MSFT Quote), which opened the door this week on yet another possible takeover of Yahoo! (YHOO Quote). Just when it seemed like Microsoft had finally walked away from a potential deal, the company admitted they're still open to negotiations -- provided Yahoo! ditches its current board of directors.

How do the maneuverings of two tech giants apply to small business? The lesson is in the way this ongoing back-and-forth is affecting Microsoft's reputation. It's fine to be aggressive in going after what you want. But act too desperate -- or come across like a bully -- and you'll lose the battle of public opinion. Microsoft can afford to look like the bad guy, but can you?

Since early this year, Microsoft has been openly coveting Yahoo!. The flirtation and haggling went on for months, until even the most dedicated technophiles began hoping for a resolution -- any resolution.

Then, suddenly, it all was over. Microsoft made what it said was a final offer, and Yahoo! held out for more. Microsoft walked away, and Yahoo! said good riddance, even as its stock price plummeted. (You can get my previous take on the story here).

Case closed, right? Not exactly. Recently Microsoft confirmed it would be willing to begin a new round of negotiations to buy all or part of Yahoo! if a new board is elected at Yahoo!'s Aug. 1 shareholders meeting.