Couldn't locate the 'Alibaba' word on the said article, I was assuming Microsoft had offered it for Yahoo alone ... as it was desperate for 'search' share?? are you sure, the bid included Alibaba share too??

yes. there was no spinco or remainco as it has now with the fdic filings.

You have to factor time value of money. MSFT offer was greater.

Interest rates have been pretty much zero that whole time.

I'm a professional trader. Please don't insult me by linking to investopedia and saying nothing of your own.

Money is pretty much free in an environment where interest rates are nearly zero. This is true whether you use debt or equity to finance a venture. If my risk-free rate is nearly zero, then I'd be willing to loan you money, or invest my money in your venture, for a fairly slim expected return.