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The lawsuit filed earlier in February against Yahoo (Nasdaq:YHOO) was for their behavior last year when they quietly refused an offer by Microsoft for the company.

According to the class-action lawsuit, filed by the law firms Barrett, Johnston & Parsley in Nashville, Tenn., and Byrne & Nixon in Los Angeles, it says the reason the Yahoo board rejected the offer was so the members would keep their six-figure jobs.

Now another shareholder lawsuit has been filed, this time by Wayne County Employee's Retirement System of Michigan. The organization owns 13,600 shares of Yahoo, and is asking a Michigan court to force Yahoo to seriously consider the Microsoft offer.

The announced job cuts of 1,100 at the company have started this week, and an alleged, but unconfirmed potential deal with News Corp. (NYSE:NWS-A) has been floating around the web.

All of this is completely distracting Yahoo from its mission, and will continue to do so.

When Microsoft (Nasdaq:MSFT) made the offer for Yahoo, it must be understood that all of this was expected to follow in the wake of the offer (other than lay offs). Just like when Rupert Murdoch made the offer for Dow Jones, priced into the offer was the elimination of all but a very few potential competitive suitors.

Microsoft did the same thing with Yahoo. Whether Yahoo likes it or not, they won't be able to simply say "we reject your offer," at least without serious consequences like a continuous flood of lawsuits.

Some people have asked questions around the Internet on why don't shareholders just cash out now and grab the share value increase coming from the Microsoft offer. There's a couple reasons why they don't.

The recent lawsuit shows you one of them: many shareholders are institutional, and represent mulititudes of people. The retirement fund of Wayne County would be in stocks for the long term. They aren't going to sell shares and take a capital gains hit against their clients. The retirment fund and its recipients would benefit far greater from a merger with Microsoft than not.

The same goes with individual investors. Many would lose much of the value of the recent gains by selling off their shares, again because of capital gains taxes.

For now, Microsoft probably only has to sit on their offer while the reactions and lawsuits mount. They know they don't have to do too much more to get the company. They more than likely may sweeten the offer sometime, but time is in their favor - not Yahoo's.

The pressure is also on Yahoo leadership who haven't been able to do anything to add shareholder value. To say the cultures of the two businesses might clash, isn't a reason in the eyes of the majority of shareholders to squash the deal, if it ends up being true at all.

This is nothing but Yahoo's fault. It underscores the weaknesses of the company, and will now keep them in the public eye until the Microsoft situation is resolved one way or another.

If you followed the News Corp. bid for Dow Jones, you're going to see a very similar scenario play out in this one. The rumor of a potential deal with News Corp. with Yahoo is only the first of several we'll hear about. Several situations like that were also rumored as on during the bid for Dow Jones.

But like News Corp. with Dow Jones, Microsoft's bid eliminated all but a few potential suitors for Yahoo. They know exactly the possibilities and who could emerge. They'll be ready to counter whatever bid may come against them, and who that bid may come from.

There is no escape for Yahoo. Either Microsoft will own them outright, or another company will get a huge piece of them. Either way they'll never be the same, and I think that's good. They've underperformed far too long with the properties they have.

It would be surprising to see anybody but Microsoft emerge as the victor in this battle.