David Hoffman published an op-ed yesterday in the Christian Science Monitor about why it might have been a good idea to mediate the deal between Microsoft and Yahoo rather than watching it fall apart. As David writes, “When Microsoft CEO Steve Ballmer met with Yahoo CEO Jerry Yang earlier this month, what kept them from making a deal? With Microsoft offering $33 per share for Yahoo’s stock, and Yahoo willing to take $37, was there truly an unbridgeable gulf? The $4 gap seems trivial in comparison to the potential value of the deal. So did Microsoft and Yahoo walk away from a deal that would have made both sides better off?”

As David notes, Professor Scott Peppet wrote on this subject several years ago arguing that mediators definitely have the potential to add value to a deal and help overcome some of the typical barriers that happen in these negotiations. In the Microsoft-Yahoo deal, David hypothesizes that a mediator may have been able to structure creative ways for dealing with different predictions of the future, may have been able to bring in neutral experts for evaluating the deal, and may have been able to better test the potential zone of agreement.

Perhaps there was, in this case, no actual zone of agreement. But now, with lawsuits pending from angry shareholders, we will never know how a mediator might have helped!