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The unprecedented crash of stock markets worldwide has sucked huge amounts of value out of public companies, with some in deep doldrums. Yahoo traded for about $12 a share today, Oct. 10; remember, nearly 10 months ago, Microsoft offered $44.6 billion for Yahoo, or $31 a share. Suddenly, Yahoo is an even better takeover target—better with billionaire Carl Icahn holding several board seats.

Yahoo is not even a fire sale. We're talking estate sale now. Yahoo is destined to be one of the great casualties of what I'm calling the "Bankruptcy 2008."

I opposed Microsoft's unsolicited takeover bid because it didn't make economic, logistical and pragmatic sense. Microsoft essentially would pay nearly $45 billion to gain search share, a bunch of data centers and lots of integration headaches. Additionally, Microsoft would have borrowed about $10 billion to finance the deal. Yahoo is a bargain at $12 a share, which is the most Microsoft should offer. Yahoo closed at $12.29 today; $17.03 billion market capitalization.

Yahoo shareholders are afraid. They're losing money. The time to bid is now, and to make a fast shareholder vote—before the U.S. presidential election—part of the offer. There are lots of reasons for the economic crisis, and the presidential election is one contributing factor. There is no leadership. Congress is in recess for campaigning. George W. Bush is making speeches and promises, actually trying to be a leader, but no one is listening. His legacy is over. But come Nov. 5 there will be a leader-elect, who can put forth a recovery plan, calm investors and bring some sanity to the insane panic that is driving world economies to recession and many businesses to ruin. Microsoft will be able to get Yahoo for a song, but only for so long. (For the record, I think one candidate will bring calm if elected, while the other will bring subdued panic; I won't publicly say which, for my intention isn't to endorse either man over the other.)

Why have I changed my opinion on Microhoo? Yahoo's star has fallen fast, making it a suddenly surprisingly good value to Microsoft and worth some of the integration risks. Also, Google has fallen on hard times. Its stock plunge, around 60 percent, and growing concerns about the advertising market make Google suddenly vulnerable.

I predict Google will make decisions over the next two months that will expose greater weakness and tarnish the brand. It's easy to be cocky and talk about making money without doing evil when times are good. But times are bad. Many Google employees are sitting on shares that aren't just underwater but miles deep. A brain drain of good employees is sure to come, and recruitment won't be as easy. Incentives will vanish, too, as Google cuts back on perks, R&D spending and new acquisitions.

As I so often write, in business, perception is everything. Microsoft may not be as sexy a company as Apple or Google, but the products are used everywhere and the portfolio is broad and deep. Google can't make such claims. Its stock fall to earth will be hard, tarnishing the brand—something Google will do, too, with increased aggressiveness in tougher times.