The four advisers, Goldman Sachs, Lehman Brothers, Morgan Stanley and Blackstone, stand to make as much as $1.3 billion between them, analysts and experts said.

Even if the dynamics leading to these rip-offs are well understood (financing need, litigation protection for the boards, etc.), this just reinforces Umair’s point. But consider the irony here:

• Blackstone itself, before the credit crunch kicked in was hiring other iBanks to provide advisory services
• Being itself in the business of providing such services probably explains why it paid them as a way to get the financing from the same banks
• MSFT and YHOO probably have by far the best understanding of their respective businesses and valuation

Advisory fees is an economic rent charged by well established middle-men, reinforced by adequate legislation.

Source: Microsoft, Yahoo bankers eye $1 billion payday – February 7th 2008