Bill Gates, good cop, apparently.

Gates - the world’s richest coder and philanthropist - basically told Yahoo! that if they want to increase the $31/offer, they have to come to the table like big boys.

Notice no mention of the word “final” in today’s talk: “Our offer is fair,” sure is, the stock was at $19 before the offer, a 62% is plenty fair, but it’s not final because YHOO was at $34 a mere two months before the offer… and its holdings in Asian securities alone tack up to $15 almost.

The omission of the world “final” speaks volumes. I think it’s clear that Gates and Ballmer realize that they have Yahoo! within their grasp. While the proxy option remains that, an option, they are actually being the more diplomatic (and why wouldn’t they be… now) party.

While YHOO is coming across as clueless and hapless, MSFT is doing and saying all of the right things. I hate to say this, but I do wonder what MSFT could do with YHOO. I know this is blasphemy with the hippie love crowd out west, but think about: isn’t GE management technically capable of acquiring all if not most companies and getting more out of them?

That’s what I see here: YHOO management dropping the ball and MSFT’s potentially being able to wring out more value out of them. Say what you want, but despite all of the risks, threats and weaknesses facing MSFT’s core operations, the company is doing better than ever.

Long: YHOO