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May-01-2008

Microsoft's Board Meets on Yahoo Bid

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CONTENTS:

Microsoft directors failed to reach a decision on the next step in the company's pursuit of Yahoo Inc., The Wall Street Journal reported Wednesday evening. (More...)
The two sides have had no formal negotiations since then but Microsoft's next move could come as early as Wednesday, the Journal said, citing people familiar with the matter. (More...)
Microsoft chief executive Steve Ballmer and other officials have stood firm on the price when speaking in public. (More...)
Being swayed by new information, it goes without saying, is a good thing. (More...)
Apparently the meeting wasn't productive at all, as the board of directors from Microsoft reportedly failed to make a decision. (More...)
Time Warner would get about a 20 percent in Yahoo if the deal is were made. (More...)
Jerry Yang, Yahoo!'s chief executive, has an indirect holding of 3.2 per cent, while David Filo, with whom Mr Yang founded the company, has 5.9 per cent. (More...)
Ballmer has no understanding of how Yahoo's website is simple, understandable and well-designed. (More...)

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Microsoft directors failed to reach a decision on the next step in the company's pursuit of Yahoo Inc., The Wall Street Journal reported Wednesday evening. The software giant may abandon the $44.6 billion deal or mount a proxy fight to oust Yahoo's board, the paper reported on its Web site, citing people familiar with the matter. Steve Ballmer, Microsoft's chief executive, is undecided on what to do, and his closest allies don't know whether he will walk away from the deal or mount a hostile takeover, The Journal said. An announcement is expected this week, the paper said. Ballmer and Microsoft's board are weighing a $44.6 billion takeover of Yahoo and had indicated that the company could raise its bid by as much as $2 a share, an increase that might not be enough to persuade Yahoo's board to sell. Microsoft examined a price of $32 to $33 a share in recent days, more than its initial $31 cash-and-stock bid, The Journal reported, citing people familiar with the matter. Yahoo wants an offer in the high $30s, and investors have signaled that they would prefer as much as $37, The Journal said. [1] Since the deadline passed Microsoft has publicly remained mum on what it may do next but has reportedly been quietly lobbying big Yahoo shareholders. Chief Executive Steve Ballmer and Bear Stearns (BSC) CEO Alan Schwartz, a Microsoft adviser, have been involved in those lobbying efforts, the Journal reported. Microsoft'''s options include launching a hostile takeover of Yahoo by nominating its own slate of directors or walking away from the deal entirely and allowing the company to remain independent. A third option includes initially walking away from the deal in the hopes Yahoo's share price could take such a hit that it would relent and accept a takeover bid. Privately, Microsoft has indicated it could up its offer above its current $29 per share value to as much as $33, the Journal reported. That may not be enough to satisfy Yahoo or its shareholders who have been hoping for an even higher offer.[2]

• The Outlook: The company's decision on how to act is expected to rely heavily on Mr. Ballmer. Microsoft this week indicated a willingness to raise its bid to as much as $33 per Yahoo share, attempting to avoid the hostile takeover battle Mr. Ballmer had threatened, according to people with knowledge of the situation. Mr. Ballmer and Microsoft advisers lobbied Yahoo shareholders to bring pressure on its board to do a deal. Mr. Ballmer in recent days has also appeared ready to walk away from Microsoft's offer altogether, say people familiar with the matter, as Yahoo and some of its shareholders seek significantly more money.[3]

Yahoo has said Microsoft's offer significantly undervalues the company, but Microsoft notes that it originally was a premium of more than 60 percent over Yahoo's share price. According to the Journal, Microsoft this week has privately "indicated a willingness" to raise its offer to as much as $33 a share, in an attempt to strike a friendly deal and avoid a hostile takeover. Its original bid, valued at $31 per share in cash and stock, is now the equivalent of $29, based on a subsequent decline in Microsoft stock. The paper said Yahoo is "shooting for an offer in the upper $30s," and that it's still pursuing alternative deals to fend off Microsoft. Those options include combining with Time Warner's AOL unit, and striking an advertising partnership with Google that experts say could prompt antitrust scrutiny.[4] Dropping the takeover bid was considered unthinkable by most investors just a week ago. Some analysts have since said that such a move would demonstrate Microsoft's unwillingness to bid against itself. It also would punish Yahoo investors, who have not been aggressive in lobbying its board to accept the half-cash, half-stock offer of $31 a share -- which has declined to $29.06 a share in value as Microsoft's stock fell. If its strongest suitor were to walk away, analysts said, Yahoo's shares would tumble. Yanking the offer would give Yahoo Chief Executive Jerry Yang more time to come up with an alternative, including a deal to outsource some of its Web search advertising to Google or a roughly 20% investment from Time Warner Inc., which would merge its AOL unit into Yahoo. Talks with Time Warner are continuing, people briefed on those discussions said Wednesday. "Ballmer should want us to think he's crazy" and willing to walk, said one major investor whom Microsoft had pressured to advise Yahoo to settle for $31 a share.[5] Comcast, the No. 1 U.S. cable TV company, reported a 12.5 percent fall in quarterly profits, to $732 million. Microsoft's board met on the company's next step regarding its proposed takeover of Yahoo!, but failed to reach a decision, according to news media reports. ( The New York Times ) CEO Steve Ballmer reportedly signaled that Microsoft could raise its bid to $33 a share, from $31 (now worth about $29 a share, due to a drop in Microsoft stock), but Yahoo! is seeking a price in the high $30s. ( Reuters ) If it doesn't raise its price, Microsoft could wage a proxy fight or walk away from the deal.[6] New York - Microsoft's board has given company CEO Steve Ballmer broad authority to decide on how to proceed with the takeover attempt of Yahoo, the Wall Street Journal reported Thursday. The board held a protracted meeting Wednesday but failed to decide whether to sweeten its unsolicited bid for Yahoo, walk away from the deal or pursue a hostile takeover deal, the report said. Microsoft had given the web portal until Saturday to accept its 41.9-billion-dollar offer but the deadline passed with no further comment from Yahoo, which had originally dismissed the bid as undervaluing the company.[7] Put simply, nothing was decided. The board did, however, offload the decision making entirely to Microsoft CEO Steve Ballmer, allowing him to decide whether to proceed with the hostile takeover bid or simply walk away. The famously indecisive Ballmer, for his part, has reportedly called some of Yahoo!'s largest shareholders to garner their support. Beyond that, news is pretty thin at this point. "The Wall Street Journal" reports that Microsoft is considering raising its Yahoo! bid from $31 a share to as much as $33 a share, despite repeated public statements to the contrary.[8] The fourth option would be to withdraw the buyout offer and go home to Redmond. Although Microsoft hasn't commented on its plans, the Wall Street Journal reports Microsoft has considered raising its bid to as much as $33 per share, although that still falls short of the $35 to $37 per share Yahoo's major shareholders seem to believe it is worth. Microsoft CEO Steve Ballmer, who has been obviously frustrated at the difficulty and delay in making this deal happen, has said Microsoft may walk away from the deal, although most industry watchers view that as more of a negotiating stance than an actual option, since Microsoft has been actively looking at acquiring Yahoo since at least 2006.[9] The Journal said that Microsoft is planning on issuing an announcement later in the week. They added that Microsoft has opened the door to raising its bid to as much as $33 per share. Yahoo has consistently said that Microsoft's initial offer undervalues their company, and major shareholders are looking for an offer between $35 and $37 per share. Last week Thursday the Journal published an article that claimed Microsoft CEO Steve Ballmer is 'hedging his bets' on the Yahoo deal.[10]

Yahoo's board maintains the Sunnyvale, Calif., company is worth substantially more than Microsoft's initial bid of $44.6 billion, or $31 per share. The Journal reported that Microsoft privately indicated it might be willing to boost its offer to $32 or $33 per share, but it also said that might not be enough to wrap up a friendly deal because some of Yahoo's major shareholders have signaled they want at least $35 a share.[11] Yahoo rejected the proposal in February, saying that Microsoft's cash-and-stock offer -- initially valued at $44.6 billion -- wasn't a fair price. When Ballmer set the Saturday deadline for Yahoo to come to terms with Microsoft, he threatened that the software vendor might launch a proxy fight for control of Yahoo's board. He also warned that Microsoft might lower its offer for the Internet services company if it had to resort to a proxy fight. Both Ballmer and Chris Liddell, Microsoft's chief financial officer, softened that stance in public comments last week, saying that giving up on the acquisition would also be an option. According to the Journal, Microsoft is willing to increase its offer from $31 per share to $33, but not to the $35-to-$37 range wanted by Yahoo's management and board members as well as some of its stockholders.[12] The lack of communication is the latest sign of a chasm that has developed since Microsoft Chief Executive Steve Ballmer lashed out at Yahoo's board in an April 5 letter. In that missive, Ballmer set an April 26 deadline for accepting his company's cash-and-stock offer, which was worth $42.2 billion, or $29.31 per share, in late afternoon trading Monday. Yahoo let the Saturday deadline lapse without elaborating on its board's unanimous opinion that the Sunnyvale-based company's slumping Internet franchise is worth more. Microsoft is expected to disclose its response to Yahoo's defiance this week.[13]

In an open letter to the Yahoo board of directors on April 5, Microsoft CEO Steve Ballmer gave the Internet giant three weeks to accept the $31 dollar per share bid - an offer which expired - or face a hostile takeover. He also warned that Microsoft could drop its bid price.[14] Steve Ballmer, Microsoft's chief executive, will decide this week whether to step up his campaign against Yahoo! and is likely to nominate an alternative board of directors and demand that its target set a date for its annual meeting. The software giant, which has failed to bring Yahoo! to the table after its $41 billion (£20.6 billion) hostile bid, has signed up "credible, independent" nominees to negotiate a takeover. It is possible that Mr Ballmer could abandon the bid. Last week he surprised his camp with remarks, made at a conference in Italy, that he could drop it, but, while his comments were serious, few believe that he will do so at this point. The opinion of Yahoo! shareholders has yet to be tested and, with Microsoft nominating an alternative board, Mr Ballmer would be able to establish how much support he has for the bid of $29.43 a share.[15] The value of Microsoft's offer, originally $44.6 billion at $31 a share, has fallen to $29.06 as Microsoft's stock has fallen. Microsoft is thought to be prepared to raise its bid to as much as $33 but that would still fall short of the $35-$37 that Yahoo's major shareholders are looking for. Chief executive Steve Ballmer has recently said he would be prepared to walk away from the deal, a threat that most analysts have dismissed.[16]

SEATTLE (Reuters) - Microsoft Corp's board met on Wednesday to discuss its stand-off with Yahoo Inc over its $41.8 billion takeover bid, but failed to reach a decision on what to do next, according to a Wall Street Journal report. Microsoft's board of directors is still weighing whether to adopt a hostile approach and nominate a proxy slate of directors to replace Yahoo's board, sweeten its cash-and-stock offer for Yahoo, or possibly walk away from the deal, the Journal said.[17] According to a related Wall Street Journal report, Microsoft's board is still deliberating as to whether it should adopt a more hostile approach with the takeover, which it threatened to implement if Yahoo did not meet the issued three-week deadline with a positive reaction. Any such hostile action would involve nominating a proxy selection of directors to replace Yahoo's existing board, and perhaps even reduce the existing offer. Reports also suggest Microsoft is considering an increase to the $41.8 billion USD, and even the possibility of abandoning its acquisition altogether. The WSJ report offers that Microsoft is prepared to boost its current offer to $33 USD per share, which, while an improvement, will still not meet with Yahoo's desired figure of between $35 to $37 USD per share.[18]

The software giant is understood to be considering putting forward an alternative list of directors to replace the current Yahoo! board. This would put on hold, a full hostile takeover put directly to the internet search engine's shareholders. The tactic of setting up the alternative board, reported by The Wall Street Journal, raises the prospect that Microsoft could continue to circle Yahoo! without making its $41 billion offer hostile for another two months, until July 12 - the date by which Yahoo! must hold its annual meeting and elect a new board.[19]

Microsoft's board emerged from the Wednesday meeting without reaching a decision, The Wall Street Journal reported, citing unnamed people familiar with the matter. Microsoft previously said it would reveal its response to Yahoo's latest snub before the end of the week. Microsoft has insisted that its offer which represents a 62-per- cent mark up on Yahoo's pre-offer price was "fair and generous". Microsoft privately has indicated it might be willing to boost its offer to as much as 33 dollars per share, up from the bid's initial value of 31 dollars per share, the Journal reported Wednesday. Microsoft sees Yahoo as a key asset in its bid to see off a challenge from Google to become the world's leading software company.[7] The deadline is gone, Yahoo made no decision, so it was time for Microsoft to think about their next step, in a meeting that took place Wednesday, the Wall Street Journal reported. The issue here is whether Microsoft will raise its bid, which Yahoo considers to undervalue them, to as much as $33 per share, compared to their $31 per share in their initial offer.[20]

With Microsoft Corp.' s Yahoo acquisition bid stuck in an apparent stalemate, the Redmond company's board met Wednesday to weigh its options but didn't reach a final decision, The Wall Street Journal reported. The two companies continue to disagree over the proposed price of the deal, the newspaper reported on its Web site, citing anonymous sources. That has been the big sticking point since Microsoft made the unsolicited, $44.6 billion offer Jan. 31. Both companies have been quiet since the passing of the Saturday deadline that Microsoft imposed on Yahoo for reaching an agreement.[4] Many observers had expected a reaction from Microsoft first thing Monday morning. With its silence continuing into this afternoon, Henry Blodget, CEO and editor in chief of the "Silicon Alley Insider" business news Web site, speculated in a post today that Microsoft leaked the information about its board's latest deliberations in an effort to help push Yahoo toward an agreement. "This leak is obviously a calculated attempt to dangle another few dollars in front of Yahoo shareholders in hopes that they will put pressure on Yahoo to strike a deal," Blodget wrote. "We suspect Ballmer and the board may now wait and see what impact this leak has before making their final decision." Blodget's online bio notes that he owns shares and/or stock options in both Microsoft and Yahoo, among other companies. The Journal reported today that Ballmer has been personally lobbying major Yahoo shareholders this week in hopes that they, in turn, would pressure Yahoo's board to accept the unsolicited acquisition bid.[12]

Ballmer apparently is having second thoughts about attempting a coup, which likely would involve several months of animosity and distraction, with no assurance of victory. Contradicting Ballmer's recent public statements, Microsoft privately has indicated it might be willing to boost its offer to as much as $33 per share, up from the bid's initial value of $31 per share, the Journal reported Wednesday. Microsoft also is weighing withdrawing its bid — a move likely to cause a precipitous drop in Yahoo's stock, which has been bolstered by the 3-month-old takeover bid.[21] Microsoft examined a price of $32 to $33 a share in recent days, more than the initial $31 cash-and-stock bid, The Wall Street Journal reported yesterday, citing people familiar with the matter. Yahoo wants an offer in the high $30s and investors have signaled they would prefer as much as $37, the Journal said.[22] The Wall Street Journal reports that Microsoft directors who met on Wednesday to decide what to do after the ultimatum was over and a source close to the transaction told the WSJ that while Yahoo is ready to sell out, there is still a big divide between what Microsoft is ready to fork out and what Yahoo is asking. The big shareholders, the WSJ continued, are asking for up to $37 while Microsoft has upped its share offer to $33, a 13.3 percent increase over the original asking price. It looks increasingly likely that only two scenarios will come out of this imbroglio : either Yahoo accepts the offer and walks away with the money, or Microsoft decides to abandon the acquisition and walks away with the money.[23]

The company is reportedly still weighing whether to adopt a hostile approach and nominate proxy directors to replace Yahoo's board, sweeten its cash-and-stock offer or walk away. Its deadline for Yahoo to start talks on a final deal or face a proxy battle passed on Saturday but there has been no comment from Microsoft since then. The Wall Street Journal says an announcement will be made later this week.[16] Microsoft's board of directors met on Monday to discuss its takeover bid for Internet giant Yahoo--and, according to a Wall Street Journal report --couldn't make up its mind. This weekend marked the expiration of Steve Ballmer's three-week deadline for Yahoo to reach a deal with Microsoft or face a hostile takeover attempt at a lower price.[9] The Microsoft boss, in his eighth year commanding the company, is facing the most important decision of his career. "The Microsoft CEO has appeared to both favor raising his bid price for Yahoo and walking way from the deal together, say people familiar with his thinking," the Journal reports. Recall that the deadline Microsoft set for Yahoo to make progress toward an agreement passed this weekend. Microsoft CFO Chris Liddell said last Thursday the company was considering its options, including a hostile takeover and dropping the deal, and would "provide updates as appropriate next week." Update, 7:20: The Journal posted another story this evening saying Microsoft's board meeting has concluded without reaching a final decision.[24] No announcement had been made by late in the day. A Microsoft spokesman said it does not comment on its board meetings. The deadline Microsoft set for Yahoo to make progress toward an agreement on its takeover offer, now a month old, passed last weekend without action. Microsoft Chief Financial Officer Chris Liddell said last week the company was considering its options, including a hostile takeover and dropping the deal. He said Microsoft would "provide updates as appropriate" this week.[11]

Microsoft's offer - which was valued at $44.6 billion when it was made public on February 1 is now worth $41.8 billion. Yahoo! has said that the offer "substantially unvalues" the company, though its chief executive Jerry Yang has said he is not opposed to a sale at a higher price. Yesterday it emerged that Microsoft may be considering a 'middle ground' between walking away from its bid and going hostile, which would involve putting forward an alternative list of directors to replace the current Yahoo! board. That raises the prospect that Microsoft could continue to circle Yahoo! without making its bid hostile until July 12 - the date by which Yahoo! must hold its next annual meeting under the laws of Delaware, the state where it is incorporated. Holding off from a hostile approach would give Microsoft shares a chance to recover from their recent fall - potentially increasing the value of its offer for Yahoo![25] The software maker has earmarked about $1.5 billion — the equivalent of nearly $1 per Yahoo share — for retention packages, according to details that emerged in a court hearing held in a shareholder suit filed against Yahoo for rejecting the Microsoft bid. A transcript of the March hearing quotes a Yahoo lawyer telling a Delaware judge that minutes from a Feb. 8 Yahoo board meeting reveal Microsoft had stated its intention to make the retention payments. Yahoo's directors haven't specified an acceptable sales price, but some analysts believe they may want close to $40 per share — a price that Microsoft indicated it was willing to pay when the two sides held private discussions in early 2007. Yahoo's earnings have sagged since then as the company lost ground to rival Google Inc. as they compete for Internet advertising sales.[21] Microsoft has two other alternatives: (1) To give up acquiring Yahoo! (it is just too expensive) or (2) withdraw the bid, wait for the stock price to fall and go for a hostile bid. Microsoft had given Yahoo! until 26 April to accept its US$41.8bn bid, which Yahoo has said is inadequate. According to the BBC Microsoft may up its bid from $31 to $33 per share, but Yahoo shareholders are hoping for $35 to $37 per share. Microsoft desperately needs Yahoo!s web content and search engine to meet the threat from Google, as its own web adventures have been halfhearted at best.[26] Yahoo has resisted a merger, saying the offer on the table, originally valued at $44.6 billion, or $31 per share, substantially undervalues the Sunnyvale Web portal. Hoping to get its way without resorting to a hostile bid, which could drag out for months and create animosity among Yahoo employees, Microsoft has considered sweetening its bid by a few billion dollars, to $32 or $33 per share, according to the report. It's unclear whether the higher price is enough to win the support of Yahoo management and its big investors, who are reportedly seeking at least $35 per share.[27]

A Microsoft-imposed deadline for Yahoo to start talks on a final deal or face a proxy battle passed last Saturday. An announcement from Microsoft is expected later this week, the report said. Microsoft, according to the report, has indicated it would be willing to raise its bid to as much as $33 per share but such an offer may still fall short of the $35 to $37 per share that Yahoo's major shareholders are looking for.[17] CapRe is Yahoo!'s largest investor and wants to see a friendly deal in a timely manner, but doesn't want Microsoft to overpay for the company, sources said. Yahoo! shareholders, many of which include hedge funds, would be happy with $33 to $35 per share and could pressure CEO Jerry Yang to do a deal if Microsoft officially raises its offer. Two months ago, Tudor Investment Corp., which owns a large stake in Yahoo!, submitted a letter to Yang and the company's board urging him to begin discussions with Microsoft to extract a higher price, sources said.[28]

The two sides had made progress on some terms of a merger about 11 days ago at a meeting in Portland, Ore., but the talks did not include negotiations on the price of a transaction, sources familiar with the situation said. Those talks ended abruptly when the Microsoft camp, including Ballmer, became steamed after one of Yahoo!'s advisers mentioned that the company was worth $40 a share - or about $14 billion more than Microsoft's offer, source said." The Seattle Post-Intelligencer has this to say: "Some analysts think Microsoft ultimately will complete the deal. Matt Rosoff, analyst at Kirkland-based research firm Directions on Microsoft, said the company probably will end up paying a couple of dollars more per share than its original offer. He said, the company may drop its offer temporarily and try to revive it later. The standoff between the companies is unusual in part because it's happening publicly, not behind the scenes. Typically, Rosoff explained, these kinds of negotiations 'go on well before an announcement is made.'"[29] The two sides had made progress on some terms of a merger about 11 days ago at a meeting in Portland, Ore., but the talks did not include negotiations on the price of a transaction, sources familiar with the situation said. Those talks ended abruptly when the Microsoft camp, including Ballmer, became steamed after one of Yahoo!'s advisers mentioned that the company was worth $40 a share - or about $14 billion more than Microsoft's offer, source said. Microsoft has recently signaled to some of its large shareholders, including mutual fund giants Capital Research and Management and Wellington Management, that it is willing to add more cash to the deal and possibly boost its bid, sources said.[28]

MICROSOFT'S BOARD met yesterday (Wednesday) to examine the company's options in the never-ending saga of its bid for Yahoo, says the New York Times. The paper quotes an unnamed MS source who claims one possibility discussed is an increased offer of up to $33 a share, despite long, loud protestations from CEO Steve Ballmer that not now, not ever, never, would the Vole's original offer be raised from its current value of around $29.[30] Microsoft, the world's largest software maker, is said to be willing to raise its offer for Yahoo!, the struggling internet portal, in an attempt to appease Yahoo! shareholders and break the stalemate between the companies. Microsoft is reportedly considering raising its cash and share offer, currently valued at $29.06 a share, to either $32 or $33 to win over Yahoo!'s institutional shareholders who feel its current bid undervalues Yahoo!, the New York Times reported.[25] Yahoo!'s shares have risen by 43 per cent - from $19.18 to $27.36 in the same period. It would also create an unexpected 'middle path' for Microsoft, where it could avoid walking away from the bid but at the same time increase the pressure on Yahoo!'s board to negotiate given the apparent lack of any alternatives to Microsoft's offer which would raise Yahoo!'s share price. A sticking point for Yahoo!'s institutional investors has been the price, with several shareholders having indicated they want an offer close to $35-a-share.[19] Ballmer and Bear Stearns CEO Alan Schwartz, a Microsoft adviser, have been lobbying Yahoo shareholders to rally support for a lower price, the Journal said. Most analysts have been predicting for weeks that Microsoft could raise its offer as high as $35 per share.[21] Yahoo! shareholders are said to be holding out for an offer between $35 and $37 a share. Mr Ballmer had earlier threatened to begin a proxy battle to remove Yahoo!'s board if the companies did not resolve their dispute by last weekend, but Saturday's deadline passed without any deal being reached, and Microsoft is yet to make its next move.[25] The value of the cash-and-stock offer had declined to $29.06 per share Wednesday, reflecting a downturn in Microsoft shares since the saga began. Even a sweetened offer of $33 per share might not be enough to wrap up a friendly deal because some of Yahoo's major shareholders have signaled they want at least $35 per share, or about $50 billion.[21]

The company hasn't set a date yet, but it must legally take place within 13 months after the last meeting, which was held June 12, 2007. Taking its case directly to Yahoo! shareholders in a tender offer would not repeal the poison pill, which allows a company to issue enough new shares to make acquiring it prohibitively expensive. Experts say Microsoft can go to court and argue that Yahoo! isn't acting in the best interest of its shareholders in rejecting an offer that provided a 62% premium to its stock. "It's conventional wisdom that a poison pill isn't usually effective in stopping a takeover with a hefty premium," says Michael Sullivan, a partner at law firm Howard, Rice, Nemerovski, Canady, Falk & Rabkin. Calling it quits is probably the least likely scenario for Microsoft because it's been eyeing Yahoo! for a long time. "They're probably disinclined to walk away from the deal," says Standard & Poor's analyst Scott Kessler.[31] The ultimatum followed Yahoo's repeated rejection of Microsoft's February 1 bid, saying it is too low and one that undervalues the company. Analysts are divided about what Microsoft's next move would be, with some expecting Microsoft to go direct to Yahoo shareholders to oust its board, while others believe that Microsoft could simply walk away from the deal. Microsoft CFO Chris Liddell made clear this week that the company was prepared to drop the bid. He told company employees on Friday "We put what anyone reasonable would say was an incredibly generous offer on the table to try to facilitate a speedy transaction.[14] Why? Because I don't think Microsoft Chief Executive Steve Ballmer could accept giving up'''that would mean Microsoft conceding that it simply could not be a leader in the leading form of consumer technology, Internet-based services. There is a good argument, of course, for Microsoft to drop its bid for Yahoo. Jerry Yang and Sue Decker, the top executives of Yahoo, have only found one plausible, if imperfect, takeover defense: their vehement opposition to a deal, which might increase Mr. Ballmer's fear that it will be harder than he thought to keep the talent and business momentum at Yahoo after he buys it. Mr. Ballmer said last week that Microsoft might walk away from its offer to buy Yahoo.[32] • The News: Microsoft's board met to discuss how to proceed in its takeover standoff with Yahoo. • The Background: Microsoft has recently signaled a willingness to raise its bid, while Chief Executive Steve Ballmer has also appeared ready to walk away from the deal if necessary.[3]

Microsoft chief executive Steve Ballmer and Microsoft advisers have lobbied Yahoos board to do a deal. Ballmer has also appeared ready to walk away from his companys offer completely, people familiar with the matter said.[33] Microsoft Corp.' s board of directors spent much of Wednesday debating whether to escalate the company's high-stakes battle to win Yahoo Inc. or walk away, according to people familiar with the talks. Microsoft Chief Executive Steve Ballmer has shown increasing willingness to abandon his pursuit of the Internet pioneer as Yahoo shareholders and management seek significantly more money, according to those people, who declined to be identified because they weren't authorized to discuss the talks.[5]

Microsoft also may be contemplating walking away from the deal entirely. That contrasted with Chief Executive Steve Ballmer's declaration, in an April 5 letter to Yahoo, that Microsoft "will be compelled to take our case directly to your shareholders" if they didn't reach a deal by the deadline. That would result in what's known as a proxy fight, in which Microsoft would nominate an alternative slate of directors for Yahoo's board, to smooth the way for its acquisition proposal. In some respects, Microsoft's lack of action after the deadline is surprising, given that it had three weeks to plot its strategy, said Carl Tobias, a law professor at the University of Richmond. It also illustrates the uncertainties of the situation. "What's the economy going to look like? How successful can they be? Can they ward off Google?" Tobias said.[4] In an open letter to the Yahoo board of directors on April 5, Microsoft chief executive Steve Ballmer gave the Internet pioneer three weeks to accept the 31 dollars-a-share takeover offer or face a proxy fight.[34] The Redmond, Wash., software giant is willing and prepared to launch a proxy fight. In an April 5 letter, Microsoft Chief Executive Steve Ballmer gave Yahoo! a deadline of April 26 to accept its offer, now valued at $42 billion, given Microsoft's weakened stock price of $28.99. (The stock closed down 84 cents on Monday.)[31]

Microsoft's ( MSFT ) deadline for Yahoo ( YHOO ) has passed and the market is rife with speculation about the future of MicroHoo. In the past few weeks, Microsoft executives' browbeating about walking away from the deal has made many analysts estimate as much as a 60% chance of this deal not happening. I, however, believe this deal will close soon without a proxy fight. Microsoft will not go hostile with their current offer. With a current offer that values Yahoo at about 29.5$per share, Microsoft is bound to lose the proxy war because even large investors, such as Bill Miller, have declared that they want the price raised.[35] Since the bid was announced, Microsoft shares have fallen by about 13 per cent to close at $28.52 yesterday. Mr Ballmer has also said he is prepared to walk away from the deal, indicating at a speech in Milan last week that he would be prepared to 'go it alone' against Google - the ultimate target of Microsoft's bid for Yahoo! - in the online advertising market.[25] Microsoft's decision will rely heavily on Mr. Ballmer. Even his closest lieutenants have been left guessing whether he will choose to launch Microsoft into a potentially tough hostile bid for Yahoo, or walk away. The apparent indecision partly reflects Mr. Ballmer's personality, say people familiar with his thinking. He can be unpredictable and at times swayed by new information, say his friends and Microsoft colleagues. It is also a sign of the tremendous weight on Mr. Ballmer, who has run Microsoft's day-to-day business since 2000, and is facing the planned move this summer by his longtime friend and business partner Bill Gates from an active role in Microsoft to full-time work in philanthropy. The success of a Yahoo test to carry search advertising from Google Inc. has played a key role in emboldening some at Yahoo in their continued resistance to Microsoft's overtures. Pending developments this week in the Microsoft standoff, a broader pact along those lines could possibly be reached within the next week, say people familiar with the matter.[3] Make a hostile bid. Ballmer could decide that he has Yahoo's valuation correct and launch a hostile bid for the company. That could get messy, reduce employee morale of both companies, and create a big distraction for Google to take advantage of. I've had the privilege of meeting with Steve Ballmer in the pastwe discussed MSFT's search marketing and opportunities to compete with Googleand I write this post with the vague possibility that I may bump into him during my visit to Redmond today. Despite the silly faces and rumored antics (chair throwing anyone?) he's incredibly smart and comes across as a man that can make a decision that others will want to follow. The question is, what decision will he make with Yahoo? Either of the three choices have the capacity of being the perfect, or worst, decision for Ballmer. If he can pull it offwhichever one he decides onhe'll secure his legacy at Microsoft. If he can't, it might be one that he never fully recovers from. Which option would you choose? Do you see a fourth option? Maybe Ballmer will read this post, so offer up your advice.[36] As Microsoft weighs its acquisition options with Yahoo, it's interesting that its board is pretty much leaving the decision to CEO Steve Ballmer. Ballmer really doesn't face an easy option when it comes to his company's takeover bid with Yahoo. There's not a "no brainer" decision that he can opt for, and walk away with everyone smiling.[36] The deadline passed without an agreement. Ballmer is undecided on how to proceed, and his closest allies don't know whether he will walk away from the deal or mount a hostile takeover, the Journal said. Microsoft is increasingly likely to drop its bid for Yahoo as negotiations stagnate, Sveinn Palsson, a Credit Suisse Group derivatives strategist in New York, said in a note yesterday. "As negotiations, or rather its lack of, persist, the likelihood of a deal happening wanes," he said.[22] Microsoft has already selected 10 nominees and three alternates, an unnamed source told the newspaper. Such a move "would represent a largely unanticipated middle path for Microsoft between walking away from its bid and pushing forward an aggressive hostile-takeover campaign," the newspaper reported. It would allow the software giant to delay fixing a firm new price on its offer for Yahoo, while preserving the option of going directly to Yahoo shareholders with a hostile takeover bid, the newspaper pointed out.[34]

Microsoft Corp.' s directors were meeting Wednesday to consider raising the software maker's $41.9 billion bid for Yahoo Inc. instead of pursuing a hostile takeover attempt, according to The Wall Street Journal.[37] The battle over the future of Yahoo! could soon reach the next level as Microsoft directors were reportedly meeting Wednesday evening on the matter. Microsoft, (MSFT), whose initial $44 billion bid for Yahoo (YHOO) in February was rejected, could announce its next move after the meeting, The Wall Street Journal reported. The software titan sees Yahoo as a sure way to bolster its struggling online business but have failed to reach a deal as of yet.[2]

TEL AVIV (MarketWatch) -- Microsoft might wage a proxy fight for Yahoo's board as a middle-ground effort between moving ahead with its hostile bid and walking away from the deal, The Wall Street Journal reported.[38] Microsoft declared it would launch a proxy fight to oust Yahoo's board or walk away from the deal if the two failed to reach an agreement by April 26. The software giant has not indicated what it will do, although the Wall Street Journal reported that it could make its next move as early as Wednesday.[39]

NEW YORK (AFP) — Microsoft could make its next move against Yahoo Wednesday with the software giant likely to try and replace Yahoo's board of directors, the Wall Street Journal reported. A Microsoft deadline for the Internet service company to accept its 44.6 billion-dollar (28.5 billion-euro) acquisition offer expired at midnight Saturday, without comment from either side.[34] April 30, 2008 (IDG News Service) Microsoft Corp.' s board of directors met today to discuss how to proceed on the company's bid to acquire Yahoo Inc., but it didn't reach any final decisions, The Wall Street Journal reported. Quoting anonymous sources, the Journal reported that an announcement by Microsoft is now expected later this week.[12] A meeting of the Microsoft board on Wednesday ended without any decision, according to the Wall Street Journal. Microsoft had given its rival until 26 April to accept its bid, which Yahoo has said is inadequate. Buying Yahoo would be the biggest acquisition in Microsoft's history and would give it a big boost in its battle with market leader Google. Microsoft, which is still expected to make an announcement on the deal by the end of this week, has three options.[40]

Report: Microsoft board meets over Yahoo bid, but doesn't decide next step The Wall Street Journal, Microsoft's board met to discuss how to proceed on the company's bid to acquire Yahoo, after the latter company let a Microsoft-imposed deadline of April 26 pass without agreeing to a deal[12]

The Microsoft board Wednesday gave CEO Steve Ballmer '''broad discretion to either go hostile or abandon the Yahoo pursuit''' but the company'''s decision will probably not be made and announced until later this week, the Wall Street Journal reports.[41]

The Redmond, Washington-based company had shown a willingness to raise its offer for Yahoo to as much as $33 per share of Yahoo in order to avoid a hostile takeover, people with knowledge of the situation told the Wall Street Journal.[33] According to the Wall Street Journal, the companies are meeting to settle on a takeover price. Microsoft may be willing to kick up its $31-a-share offer by a dollar or two, but it may not be enough for Yahoo! shareholders.[42] In a surprising turn of events, Microsoft is now indicating it would be willing to raise the value of its offer to buy Yahoo something it has publicly stated multiple times it would not do. Microsoft leaked to The Wall Street Journal that it is willing to go as high as $33-a-share (well above the current deal now valued at just over $29-a-share).[43]

Despite meeting yesterday, the Microsoft Board of Directors - according to the Wall St. Journal - has not decided whether its $31 a share offer for Yahoo!, which has fallen in value to $29 a share in line with a fall in Microsoft's own stock value, should be hoisted to $33 a share in an attempt to keep alive Redmond's two-year pursuit of the Silicon Valley based search giant.[29] Yahoo's shares gained 5 cents close at $27.41 on Wednesday. Yahoo's stock price stood at $19.18, near its four-year low before Microsoft made its offer three months ago. Even if Microsoft decides to withdraw its bid one of the possibilities it is considering some observers think it could return with another proposal if Yahoo's stock deteriorated during the next few months.[11] Yahoo!, meanwhile, continues to explore options that would allow it to remain independent, including a possible tie up with AOL, the internet unit of Time Warner. Its shares have risen by 43 per cent, to $27.41, since Microsoft made its offer. Analysts have suggested that Yahoo! shares would likely drop substantially if Microsoft abandons its bid.[25] Holding off from a hostile approach would give Microsoft shares a chance to recover from their recent fall - potentially increasing the value of its offer for Yahoo! Since Microsoft announced its bid on February 1, its shares have fallen by 12 per cent from $32.60 to $28.64, meaning that its original $31-a-share offer was valued at $29.12 as of the close of markets yesterday.[19]

Yahoo's board maintains the Sunnyvale-based company is worth substantially more than Microsoft's initial bid of $44.6 billion, or $31 per share.[21] Microsoft might increase its bid for Yahoo Boston Globe NEW YORK - Microsoft Corp., weighing a $44.6 billion takeover of Yahoo Inc., may raise its bid by as much as $2 a share, an increase that might not be enough to persuade Yahoo's board to sell.[22]

The Saturday deadline for Yahoo (nasdaq: YHOO - news - people )'s acceptance of Microsoft (nasdaq: MSFT - news - people )'s $44.6 billion takeover bid passed with no deal.[44] The software giant's board gathered Wednesday to examine their $41.8 billion Yahoo takeover bid and what their next move should be, the Journal reported. The board is weighing three options: raise its bid for the search engine, engage in a proxy war or simply abandon the deal.[10]

'The longer that process takes, the more Microsoft's rank-and-file workers and executives weigh the consequences of what would be Microsoft's largest acquisition ever -- and many are against it, say Microsoft employees and other people familiar with the company,' the article read. Even after Yahoo reported earnings that beat expectations, Microsoft refused to budge on its $44 billion bid for the internet search giant. Wednesday, Ballmer said his company will 'move forward' if their bid is dismissed by Yahoo.[10] Yahoo! has 1.4 billion shares in issue. Microsoft's board met yesterday to discuss a range of options, and its chief executive Steve Ballmer has personally called some of Yahoo!'s shareholders, the largest of which is Capital Research Global Investors, with a 6.4 per cent stake, to get their support for a bid in that range.[25] Microsoft chief executive Steve Ballmer, who is also a member of the board, has appeared ready in recent days to abandon the offer since Yahoo and its major shareholders want significantly more money, according to the Journal.[45]

The range of options open to Microsoft and its CEO Steve Ballmer include raising his current offer for Yahoo!, taking it directly to shareholders or walking away from the deal altogether.[28] Raising the price and then going to proxy fight seems totally stupid. Microsoft will not walk away from this deal. Obviously Steve Ballmer has had his eyes on Yahoo for some time now. Microsoft has determined that Yahoo is essential for its future and a few billions is not worth betting on the company's future.[35] I've never had $29 billion in my bank account, as Microsoft does, but I suspect that it creates a feeling of possibilities. In the next few days, I expect he'll announce a full-on proxy fight. If he does say he's walking away, I suspect it will simply be a ploy to bargain over price on the bet that Yahoo or its shareholders will come running into his embrace later. Then three years from now, after Microsoft has spent all its cash, diverted its resources and perhaps gotten distracted from its other businesses, there may be a moment where Mr. Ballmer has to really confront the limits of the company.[32]

Ballmer and other Microsoft officials have stood firm on the price when speaking in public. Yahoo CEO Jerry Yang has said Microsoft's offer "substantially undervalues" his company. Legg Mason fund manager Bill Miller, Yahoo's second-biggest shareholder, said in February that Microsoft will need to boost its bid.[1] Taking the bid off the table for now could pave the way for a friendly deal in a few months if Yahoo Chief Executive Jerry Yang's turnaround efforts don't pan out. Should Yahoo's lackluster results of the past two years continue during the current quarter, which ends in June, its stock likely will sink even lower and open the door for Microsoft to return with another offer more likely to be embraced. Microsoft also could still sweeten its offer, although Ballmer and Liddell said last week that the company won't up the ante.[13] When it made the unsolicited bid for Yahoo three months ago, Microsoft counted on clinching the deal quickly. It has encountered significant resistance from Yahoo, which has insisted that the offer was insufficient to insulate the company from the risks it would run in accepting it.[5]

Raising the offer would be one way for Microsoft, the world's biggest software maker, to clinch a friendly deal with Yahoo, or make it easier to win a proxy fight to oust the Internet company's board.[22] Now that the deadline has come and gone without Yahoo agreeing to a Microsoft takeover, Microsoft has to decide how it wants to proceed. The company basically has four options: raise its offer for Yahoo (which it has repeatedly indicated it won't do), or try one of two hostile takeover tactics: nominate its own directors for the Yahoo board (who, if elected, would favor a Microsoft buyout), or take their offer directly to investors and hope to sway enough of them to go along with the takeover.[9] Last month, Yahoo! withdrew a deadline for the nomination of directors to its board and the company has yet to set a date for its annual meeting. Under the law of Delaware, the state in which Yahoo! is incorporated, the company must hold its annual meeting within 13 months of the previous one, with the last date being July 12. Microsoft could also launch a formal exchange offer, into which Yahoo! investors could tender their shares, but it is reluctant to do so.[15]

On receiving the threat, Yahoo basically said it was open the idea of Microsoft taking over the company, but needed to see a better offer than Microsoft's $31 per share.[9] Yahoo's deadline to respond to Microsoft's $31 per share cash-and-stock offer came and went on Saturday, and so far there hasn't been a peep from either side.[46]

Microsoft's original cash-and-stock offer for Yahoo was valued at $29.06 per share as of 4 p.m. trading Wednesday on the Nasdaq Stock Market.[3]

Offer more for Yahoo. Microsoft has indicated it might increase its bid to $33 a share, but that's still off from the $35-37 number that Yahoo (and its shareholders) appear to want. Offering more would bring a swift conclusion to the protracted negotiations, but down the road he might find stakeholders questioning whether he overpaid or not.[36] Yahoo shares gained five cents Wednesday to finish at $27.41. Before Microsoft announced its unsolicited bid in February, Yahoo's stock price stood at $19.18, near its four-year low.[21] Microsoft's bid was originally valued at $44.6 billion, but because the offer was a mixture of stock and cash, it has since dropped to less than $42 billion due to a fall in MS' share price.[30] The value of Microsoft's offer, originally valued at $44.6 billion at $31 a share, has fallen to $29.06 a share due to a drop in the value of Microsoft's stock.[17] The initial offer made by Microsoft on February 1 was $31 a share, adding up to a grand total of approximately $44.6 billion, but after a downfall in Microsoft's shares, it is now worth about $42 billion, still making it, if finalized, the biggest-ever takeover in the high-tech industry.[20]

Microsoft's shares lost 12 cents to close at $28.52 on Wednesday. That put the value of the current half-cash, half-stock offer for Yahoo at $41.8 billion or $29.06 a share.[11] Microsoft has $29 billion in cash. Microsoft executives have said publicly that they wouldn't sweeten the offer, and they fear that by doing so they would reward Yahoo's board for its refusal to negotiate, people close to Microsoft said.[5] Microsoft's board agreed to disagree following the Monday deadline for Yahoo to accept their offer to purchase the Search engine company at $29.12 in their original cash-and-stock offer.[23] Despite tabling a bid of $41.8 billion USD in its two-year pursuit, Redmond-based Microsoft has had its recent deadline offer staunchly rebuffed by Yahoo, which would appear to be holding out for an improved figure from Microsoft -- or any other interested party.[18] Microsoft Corp.' s directors were meeting Wednesday to consider raising the software maker's $41.9 billion bid for Yahoo Inc. instead of pursuing a threatened hostile takeover attempt, according to a published report.[21] Microsoft had issued a 3 weeks ultimatum to Yahoo to enter into talks or the software developer will consider a hostile takeover by taking the matter to Yahoo's shareholders. Google CEO Eric Schmidt made it clear he is not pleased with the prospect of a Microsoft-Yahoo conglomerate on Wednesday. Schmidt said that a two-week Ad partnership trial with Yahoo went well, and said he expects it to be one of several options Yahoo's executives are considering for their future.[47] With a self-imposed deadline nearing, Microsoft Corp. on Wednesday was still deciding its next move in its takeover bid for Yahoo Inc. The Redmond, Wash., software giant is mulling over several options in its three-month merger saga, which would combine two huge technology companies and provide a more formidable competitor to Mountain View's Google Inc. Last week, Microsoft promised to reveal its next move in the high-profile chess game by Friday.[27]

With Internet titan Yahoo Inc. seemingly immovable in its stand to resist the takeover advances of American software beast Microsoft Corp., various news outlets are reporting that Microsoft's board of directors has gathered this week to engineer its next strategic move in the acquisition stand-off.[18] You know it's a slow news day when the top story concerns a board meeting at which no decision was made. That's where we're at in the seemingly never-ending drama of Microsoft v. Yahoo!: Microsoft's board of directors met yesterday to discuss how to proceed with regards to the company's Yahoo! takeover efforts.[8] The Wall Street Journal's anonymous sources say Microsoft's board of directors is meeting now to weigh its next step in the Yahoo takeover drama.[24] Microsoft's board of directors met Wednesday to consider the company's next move in its pursuit of Yahoo, according to unidentified sources quoted in The Wall Street Journal.[11]

According to Associated Press Microsoft's directors yesterday considered upping their bid for Yahoo! According to the Wall Street Journal they did not make a final decision.[26] The decision on raising the software maker's US$41.9 billion could emerge after the meeting of Microsoft directors, The Wall Street Journal reported Wednesday, citing unnamed people familiar with the matter.[47] Microsoft was unlikely to make a move on Monday, however, people familiar with the matter said," The Wall Street Journal reported in an article on Monday.[48]

The two sides have had no formal negotiations since then but Microsoft's next move could come as early as Wednesday, the Journal said, citing people familiar with the matter. One option being considered is nominating a proxy slate of directors that Yahoo shareholders would be asked to vote onto their company's board, replacing current officials. [34] Neither of the companies wished to comment on Wednesday. Yahoo is expected to hold a meeting of its own on Friday, a person familiar with the company revealed. After months of failed negotiations, Microsoft gave Yahoo an ultimatum in an April 5 letter, stating that if the two companies will not begin a negotiation on a definitive agreement within three weeks, they will take the case directly to the shareholders and start a proxy contest to elect a slate of directors for Yahoo board. The deadline, which was due this week, expired silently for both sides.[20] If Yahoo! didn't agree to a deal by the deadline, Microsoft would "take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo! board," Ballmer wrote.[31] Sources familiar with the discussions said Ballmer and Microsoft are lobbying Yahoo shareholders to pressure Yahoo's board into accepting a deal with Microsoft. The situation isn't that simple, as not all shareholders want the same thing, and some of them appear to want more money as well, which makes Ballmer's work even harder.[20]

I think Microsoft should forget about yahoo all together. There is no return on investment in this deal instead microsoft should use this money ($45B) to increase the efficiency and market share of their search engine. It is all about search because major part of the ad revenue comes from search. Microsoft should learn how to think 5 steps ahead (just like google and apple). they should not do what Apple and Google won't do, so for example Apple/Google will never make a mistake of buying Yahoo. What they (Apple/Google) will do is to bring innovative product in the market and find innovative ways to make money from Ads and thats what Microsoft should do with the power of $45B. Buying Yahoo is not an innovative idea - its a damn foolish idea.[32] Microsoft is falling further behind. Even with aQuantive, its ad revenue was $619 million in the quarter, one-third the size of Yahoo and one-eighth that of Google. What could Mr. Ballmer do? He could buy AOL to add some banner ad inventory or he could buy Ask.com to add a few points of search market share. The odds range from improbable to impossible that any of this could create a consumer Web business that will actually rival Google.[32]

An announcement is expected later in the week, say people familiar with the matter. The apparent indecision partly reflects Ballmers personality, people familiar with his thinking told the Journal. Friends and Microsoft colleagues say he can be unpredictable and is at times swayed by new information. Yahoo could extend its search advertising relationship with Google Inc to include a broader pact than the current one, pending developments this week with Microsoft, people familiar with the matter told the Journal.[33] The WSJ is reporting that Microsoft's board, having met to decide what to do about the Yahoo bid, has decided, um, not to decide what to do about the Yahoo bid. The apparent indecision partly reflects Mr. Ballmer's personality, say people familiar with his thinking. He can be unpredictable and at times swayed by new information, say his friends and Microsoft colleagues.[49]

Executives worry that it would be an expensive distraction when Windows, Office and Xbox all need money and attention. Imagine, then, Mr. Ballmer pausing to consider the merits of this argument. Fixing Yahoo indeed would become his top priority for the next few years. He may well wonder whether Microsoft, even combining its resources with those of Yahoo, could really catch up with Google, especially given the inevitable regulatory delays and merger headaches. Then imagine Mr. Ballmer contemplating what Microsoft would look like the day after he announced that it was dropping its bid for Yahoo. He'd look at the sinkhole of its online business, which has gone through billions of dollars over 13 years and is still losing money.[32]

Indicating investors aren't expecting a higher bid, Yahoo shares were unchanged at $26.80 in Monday's late afternoon trading while Microsoft shares shed 79 cents to $29.04. In an even more remote possibility, Microsoft could set another negotiating deadline in hopes that its executives might be able to reopen talks with their Yahoo counterparts.[13] Ten nominees and three alternatives have already been selected, the newspaper reported. This would enable Microsoft to maintain its pressure on Yahoo or have to walk away from the deal. Since Microsoft made its bid, its shares have taken a 12% tumble.[46] Microsoft has yet to decide if it will up its $41.8bn ('21bn) bid for Yahoo, go hostile or walk away from the deal.[40]

While everyone waits for Microsoft to act, industry watchers have been busy speculating what will happen next. "My guess is that Microsoft will follow through with its threat to file a slate of directors by the end of the week," says Ryan Jacob, a portfolio manager with the Jacob Internet Fund, which holds a stake in Yahoo. The alternative is for Microsoft to abandon its deal. Microsoft executives last week strongly hinted that they would be willing to walk away.[39]

Steve Ballmer (pictured) was talking about perhaps walking away from the whole deal last week, though not many commentators took it literally. The LA Times reports this morning: "Much of the decision on whether to press forward resides with Ballmer. A growing number of Microsoft executives are urging him to find other ways to bolster the company's online business.[29] The CEO of Bear Stearns, who couldn't manage THAT company sits on the Microsoft board.that should tell us something about the ethics at Microsoft! Microft represents BIG BROTHER and spying to me. Try downloading Windows Media without them checking the software on your computer. Microsoft has caused me two major crashes, one when Windows SUDDENLY "developed" a password on it's on, effectively locking me out of my computer. When I called Microsoft for help, they directed me to their website (without my computer of course). They failed to help me in any way, eventually causing loss of all my data and reloading windows. If a company MANUFACTURES a product, they should be able to tell a consumer HOW TO USE IT. I intend to use Apple in the future. Steve Ballmer should keep his letcherous, treacherous hands off Yahoo. Yahoo provides good service to its users. With Microsoft there's NO SERVICE, just money! They owe me for two copies of Windows, and loss of data twice! Mr. Ballmer, where do I submit my claim? If more people would submit claims for all those Windows-"caused" computer crashes, they'd be LOSING even more money.[32] Steve Ballmer, Microsoft's chief executive, has also indicated, however, that the company would be willing to 'go it alone' against Google in the online advertising market without Yahoo![19] Microsoft Chief Executive Steve Ballmer had threatened to oust Yahoo's 10-member board — including Yahoo co-founder and CEO Jerry Yang — if it didn't relent and agree to a sale.[21] Steve Ballmer, the software giant's chief executive has threatened to take the bid hostile and nominate directors to replace Yahoo's board.[40]

As the week drags on, with Microsoft CEO Steve Ballmer under pressure to propose which option to take in his unsolicited bid to buy Yahoo, here are some stats to put in the spreadsheet.[50]

The outcome of the so-called proxy contest probably wouldn't be settled until Yahoo's annual meeting, which might not be held until July. Both Ballmer and Microsoft's Chief Financial Officer, Chris Liddell, publicly suggested last week that the Redmond, Wash. -based software maker might retract its offer — a move that would likely cause Yahoo's stock to plummet.[13] "Yahoo! has remained firm that Ballmer's original $31 a share cash and stock offer, which is now valued at $29.06, substantially undervalues the company.[29] The divide on price has remained a thorny issue. Major Yahoo shareholders have signaled they want in the range of $35 to $37 a share, with Yahoo's management and board similarly shooting for an offer in the upper 30s, say people familiar with the matter.[3] Influential Yahoo shareholders are clamoring for a figure between $35 and $37 per share, while the company's management and board are seeking an unspecified amount in the high $30s.[51] Major Yahoo shareholders, management and the board are looking for at least $35 a share, the WSJ quotes it sources as saying.[41]

Yahoo!'s biggest shareholders have said that a bid of at least $35 a share would be required to get the deal made.[8] The apparent strategy is to get comment out of Yahoo CEO Jerry Yang on whether or not the upped offer would be accepted. Earlier reports have both shareholders and Yahoo execs saying "I see your $32-33 and raise you a $35-37." This is not likely to please the big wigs from Redmond. They may have forced their own hand in the matter when they didn't offer a higher bid sooner. It's the Yahoo-Google deal that likely tipped the scales in favor of Yahoo in the negotiating process.[52]

We've stated multiple times that Microsoft would jump at the chance to raise the bid if it thought it would get the deal done quickly. The surprising part is that this maneuver still may not get the deal done quickly, because Yahoo is now thought to want in the upper $30s-a-share.[43]

Software giant Microsoft is unsure of its next step in its bid for internet firm Yahoo, now worth $41.8bn (£21.1bn), after an inconclusive board meeting.[16] NEW YORK - Microsofts board of directors did not reach a final decision at a Wednesday meeting about what steps it should take in its bid for Yahoo, according to a report. Get stories by e-mail on this topic.[33] A decision could emerge after the meeting, the newspaper reported, citing unnamed people familiar with the matter. Microsoft also is weighing withdrawing its bid a move likely to cause a precipitous drop in Yahoo's stock.[37]

The next day, Yahoo stock will tumble to $15 and then Microsoft can buy all available shares on the open market on-the-cheap.[32] There is no question that paying $46.5 Billion for Yahoo! is the cheapest and fastest way for Microsoft to gain market share bulk and gain significant revenue gains from Internet advertising.[32] Microsoft has earmarked $1.5 billion to retain Yahoo employees following a merger, according to a court transcript in a shareholder suit against Yahoo by two Detroit pension funds. A Yahoo attorney, citing communications between Microsoft's and Yahoo's general counsels, said Microsoft intended to make the money available to Yahoo employees to entice them to stay with the combined company. Yahoo's management had implemented a program that would give employees up to two years of pay if they left for good cause or are laid off following a merger.[27] Court documents in a shareholder suit against Yahoo, citing a conversation between the Microsoft and Yahoo general counsels, say Microsoft "has earmarked $1.5 billion for employee retention at Yahoo."[4]

What every Business Should know about SSL Security and Consumer Trust. The $1.5bn figure came to light in court documents in a shareholder action filed against Yahoo in Detroit, which claimed that Yahoo had let its shareholders down by not responding to Microsoft's offer.[46]

Yahoo still holds two trump cards that could thwart a Microsoft takeover. It has tested a potential advertising partnership with Google that could lead to a long-term alliance if it can win regulatory approval. It has explored merging with the online operations of Time Warner Inc.' s AOL. If Microsoft scraps the Yahoo offer, it will intensify the pressure on Ballmer to prove he can come with another plan to mount a more formidable challenge to Google — the main reason Microsoft wanted buy to Yahoo.[21] Wait, did you hear that? Me neither. The Saturday, 4/26 deadline given to Yahoo by Microsoft for its takeover offer came and went without any resolution, and according to a New York Times story today on the topic, "two companies are still not talking."[53] The lack of enthusiasm from Yahoo! for the Microsoft takeover offer was not expected by the software giant, according to one analyst. Microsoft is considering its options regarding a takeover of Yahoo! after the deadline it set for the search pioneer to accept its 31 cent-per-share offer expired without comment this weekend.[54]

Four days have passed since the expiration of Microsoft's deadline for Yahoo to accept its buyout offer or face a hostile takeover.[39] Most analysts believe Microsoft wants Yahoo badly enough to attempt a hostile takeover, a risky process that would probably include a mudslinging campaign to replace Yahoo's 10 directors with board members more receptive to a deal.[13] Microsoft is to consider raising its previous bid for Yahoo instead of pursuing a threatened hostile takeover attempt.[47] Jacob predicts a carrot-and-stick approach in which Microsoft would sweeten the bid slightly while initiating a hostile takeover. "The stick is launch the proxy battle and the carrot is convert the deal to cash," he says.[39]

Microsoft is reluctant to start a hostile takeover and may walk away from the offer, the Journal said. Microsoft has said it will make a decision this week.[22] A hostile takeover would likely involve a proxy fight to oust Yahoo's 10-member board including co-founder and CEO Jerry Yang and taking the offer directly to shareholders.[11] The software giant, which has been officially pursuing the struggling Internet portal for nearly three months, has several options. It can call it quits. It can sweeten its offer in hopes that Yahoo! (nasdaq: YHOO - news - people ) will agree to a friendly merger. It can take its proposal directly to Yahoo! shareholders. Or it can launch a proxy fight to replace Yahoo!'s board.[31]

Hilal also notes that Microsoft probably won't use the strategy of walking away from Yahoo! temporarily in hopes of coming back later with a lower offer, because it can't afford to lose any more ground to archrival Google (nasdaq: GOOG - news - people ) in online advertising. "Time is of the essence," he says.[31] The NYT story says Ballmer hinted at the possibility of walking away last Wednesday, but TechCrunch today posted up bios for 10 people it thinks Microsoft may name to the Yahoo board in a proxy fight.[53]

Industry watchers say the last option makes the most sense. Microsoft (nasdaq: MSFT - news - people ) likely would replace Yahoo!'s board with a board of its choosing that would dissolve Yahoo!'s poison pill anti-takeover clause and approve the deal.[31] The situation now could go two ways: either Microsoft continues to go forward with the deal, or just give up on the idea. The decision appears to lie in Ballmer's hands now, and it's hard to tell what he might be thinking. Last week, Ballmer said Microsoft could take into consideration to stop pursuing a deal with Yahoo, however, most analysts dismiss this option.[20] Frankly, it would be in a pitched battle for distant second place with Yahoo. If Mr. Ballmer were willing to concede that Microsoft isn't going to win the hearts of consumers on the Web for search and portal services (other than perhaps e-mail), he has lots of options. He could try to provide advertising services to publishers and marketers, building on aQuantive. Or he could pull out of the advertising market altogether and double down on Microsoft's core market, which consists of building software'''and software as a service'''for businesses. This would be analogous to the choice made by IBM to abandon its consumer and small business lines in favor of services, technology and servers. Any of these choices, however sensible they may seem to the outside world, would require Mr. Ballmer to accept that Microsoft faces real limits and that it can't solve any problem by deploying another 1000 engineers and $100 million for marketing. There's nothing I see that says that Mr. Ballmer has reached one of those hit-bottom moments to make him face up to Microsoft's own limits.[32]

As Google ( GOOG ) eats the search share from Microsoft and Yahoo, time is of the essence for Microsoft. As time passes, Yahoo's value is going down for Microsoft, so Microsoft will want this deal done fast.[35] "Every day that goes by, Google gets better and better and takes more share." Last week Microsoft Chief Financial Officer Chris Liddell said the company would announce a plan this week for how it will proceed with Yahoo![31] Yahoo's dealings with Google and AOL are also a large factor, as CEO Jerry Yang comes up with methods to demonstrate the company's value to investors. If Microsoft fails to come to a decision regarding a better offer, Yahoo could solidify its relationship with search giant Google, discouraging investors from harming Yahoo's fiscal ecosystem.[51] After rejecting the offer as too low, Yahoo sought other deals. Yahoo chief executive Jerry Yang has said Microsoft's offer "substantially undervalues" his company.[22] Some analysts think Microsoft ultimately will complete the deal. Matt Rosoff, analyst at Kirkland-based research firm Directions on Microsoft, said the company probably will end up paying a couple of dollars more per share than its original offer. He said, the company may drop its offer temporarily and try to revive it later. The standoff between the companies is unusual in part because it's happening publicly, not behind the scenes. Typically, Rosoff explained, these kinds of negotiations "go on well before an announcement is made."[4] I will not be surprised if the deal is finalized in next couple of weeks at north of 35$per share. When this deal is finalized, the shares of both companies will rise, but in long run, I would be highly bearish on Microsoft.[35]

The original cash-and-stock deal, valued at $31 a share, is now worth $29.15 based on Microsoft's share price Tuesday.[39]

Microsoft's board of directors is still weighing whether to nominate a proxy slate of directors to replace Yahoo's board or abandon the deal.[14] Microsoft's board met yesterday to decide what to do about their takeover bid for Yahoo. and reportedly couldn't make up its mind.[9] SAN FRANCISCO (AP) — The top executives at Microsoft Corp. and Yahoo Inc. haven't held any recent discussions to break an impasse that threatens to turn Microsoft's 3-month-old takeover bid into a slugfest.[13]

The boardroom intrigue heightens the suspense hanging over Microsoft's bid since Yahoo let pass an April 26 deadline for accepting the offer. Microsoft has indicated it will reveal its response to Yahoo's latest snub before the end of the week.[21] Microsoft Corp's deadline to Yahoo to accept its $40 billion-plus offer passed without a word, setting the stage for the next act in the corporate drama.[14]

If the Redmond, Wash. -based software company decides to press the acquisition, it could either try to win Yahoo's approval by sweetening the offer, initially valued at $44.6 billion, or take the fight hostile by nominating a slate of candidates for Yahoo's board.[5] Separately, Marc Andreessen, co-founder of Netscape, provides a thorough breakdown of the options for Microsoft and Yahoo. Especially interesting is the part about a potential legal fight if Yahoo's board decides to exercise its poison pill as a defense to a tender offer by Microsoft.[48] One middle path that remained an option was nominating a proxy slate of directors to replace Yahoo's board, while waiting to put any acquisition offer directly to Yahoo shareholders.[3] If Microsoft proceed with a proxy battle, the question is how much will it offer to Yahoo ( YHOO, Fortune 500 ) shareholders.[39] The suit argues, in part, that Yahoo's management failed to look after shareholders' interest by rejecting Microsoft's merger offer.[27]

As of early April, Ballmer had participated in at least two meetings with Yahoo, according to a letter that Yang sent to Microsoft to reiterate the company's demand for a higher offer.[13] The deadline for Yahoo! to accept Microsoft's buyout offer expired last Saturday without a word from either company.[31] Personally I would offer more for Yahoo. I feel that Microsoft really need to get a foothold in the online business as it's going to be ever more important to the future of the company.[36]

Microsoft's Vista is a triumph of Fear - of the future - and brings to mind a miser, sitting in a darkened room on a pile of gold coins, afraid to invest in the future. Apple showed its mettle by daring to switch from Motorola processors to IBM, and again later to Intel, all while keeping extensive support for their current customers. They did this as well in their operating systems, moving from the outdated System 9, and on to the modern, safe OS X ALL while supporting their current customers and providing a path the the future for them and their company. Microsoft still clings to customers running systems that are 10, 15 or more years old, while punishing the rest of their customers with ever-increasing complexity and unreliability. No wonder Ballmer wants Yahoo: He's desperate for anything to prop him and his company up.[32] We all know the more people criticize Ballmer's Yahoo obsession, the more stubbornly he will pursue it, the more he endangers mega-monopolist Microsoft's future.[32]

Word on the street suggests that Microsoft has a formidable slate of new board candidates, including former Adelphia Communications (other-otc: ADLNQ.PK - news - people ) Chief Financial Officer Vanessa Whittman; Jaynie Studenmund, former chief operating officer of keyword advertising specialist Overture Services (now part of Yahoo!); former Grey Global Group head Edward Meyer; and former Nextel Partners chief John Chapple. Yahoo! has 10 executives on its current board.[31] The Street will be tracking the ongoing drama between Yahoo! (nasdaq: YHOO - news - people ) and Microsoft (nasdaq: MSFT - news - people ).[42]

Microsoft is allocating $1.5bn for staff retention of Yahoo employees if its unsolicited buyout goes ahead, according to a Wall Street Journal article.[46] Late yesterday afternoon, the Wall Street Journal got word of a Microsoft board meeting. Ever since they reported the news, the speculation and rumor mills have been working overtime.[52] Microsoft's board met Wednesday without reaching a decision, according to the Wall Street Journal.[27]

According to The Wall Street Journal, Ballmer's threats remain stagnant due to his unpredictable nature, leaving many in the industry questioning whether he plans to follow through with replacing Yahoo's board through its investors.[51]

Mr. Ballmer had said last week that Microsoft was considering walking away from the deal. Most Wall Street analysts dismiss this as a hardball negotiating tactic rather than a real threat to end its two-year-long pursuit of a deal.[45]

All of the parties with a stake in the proposed deal have been waiting for Microsoft's next move since Yahoo didn't agree to a deal by last Saturday, the deadline that Microsoft had set three weeks earlier.[12] "There are so many imponderables, you can't even isolate all the variables. It's no wonder it's difficult." New information has emerged about Microsoft's plans to bring Yahoo into its fold, if it can complete a deal.[4]

Microsoft, the world's biggest software maker, could make its next move on Yahoo! as early as today, following the failure of the companies to reach an agreement over a takeover deal.[19] On the culture and technical sides of the deal, it will be like pulling hen's teeth to bring the two companies together. Microsoft would be better served to let Yahoo be semi-autonomous and retain its own identity.[32]

Yahoo's decision to partner with Google could also explain Microsoft insistence on getting a deal done now.[23]

Just two days later, Yahoo announced it was exploring an Internet advertising partnership with Google Inc., whose dominance of the online search market was the main trigger for Microsoft's bid. AP Technology Writer Jessica Mintz in Redmond, Wash., contributed to this story.[13] There is no doubt that Microsoft could live without Yahoo, but acquiring Yahoo would put it in a much better position to compete against Google in the Internet search and advertising arena.[14]

Internet software and services stocks wavered as Monday passed with no word of possible negotiations between Yahoo Inc. and Microsoft Corp.[44] Responding to a question Monday from The Associated Press, Smith said no meetings have been scheduled among executives at Microsoft and Internet pioneer Yahoo.[13]

Microsoft had given Yahoo a Saturday deadline to enter into meaningful talks or face a withdrawal or proxy fight. As that date neared, frustrated Microsoft executives said they would announce their intentions this week.[5] People close to Microsoft told the Journal that the company has mulled over such an approach. MSFT has said it would announce its next move regarding Yahoo this week, the Journal report said.[38]

As many people have believed (and so do I) that buying Yahoo is "is the cheapest and fastest way for Microsoft to gain market share bulk and gain significant revenue gains from Internet advertising."[32] Microsoft will at least give Yahoo! a strong financial clout. Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages.[26] Yahoo's share price, in contrast, has risen 43% over the same period. Microsoft is expected to announce its next move imminently.[46]

In another 3 months, Microsoft is going to get Yahoo much cheaper for around $24 / $25 and Yahoo shareholders will not want to lose out on that second chance.[35] Microsoft, based in Redmond, Wash., offered $44.6 billion for Yahoo Jan. 31.[22] A proxy battle could cost Microsoft between $20 and $30 million, much cheaper than Microsoft's opening bid of $44.6 billion.[10]

If Yahoo's stock deteriorated during the next few months, Microsoft could return with another bid that would be more difficult to turn down.[21] Microsoft fell 12 cents to $28.52 in Nasdaq Stock Market trading. Sunnyvale, Calif. -based Yahoo, which has gained 18 percent this year, rose 5 cents to $27.41.[22] Yahoo's stock price stood at $27.41 when the stock market closed today. In the meantime, Yahoo and Time Warner Inc. have continued to explore the possibility of Yahoo merging with the latter's AOL LLC subsidiary in exchange for Time Warner getting a 20% stake in Yahoo, the Journal reported. Nancy Gohring of the IDG News Service contributed to this story.[12]

Yahoo! said that it believed that the ball was in Microsoft's court. It is continuing to talk to Time Warner and News Corporation, parent company of The Times, about a potential rescue.[15]

Microsoft has not yet issued any formal comment on the next turn in the acquisition saga, but CEO and board member Steve Ballmer has said that Microsoft might be on the verge of throwing in the towel. Industry watchers believe this is unlikely and that Microsoft is merely strong-arming Yahoo into finally buckling under pressure.[18] The Journal also suggests that Microsoft could nominate an alternative set of board directors to replace Yahoo's own.[46] Microsoft has reportedly tabled a list of 10 candidates that it is ready to nominate for election to Yahoo!'s board, according to reports. From the date on which Yahoo! publicly announced its meeting, Microsoft would have 10 days to submit its proxy slate.[19]

In the nine months ended in March 31, the online unit lost $745 million. In the most recent quarter, excluding acquisitions, its revenue grew only 16 percent. On the bright side, to be fair, Microsoft's advertising revenue, excluding its acquisition of aQuantive, grew by 29 percent, which is actually closer to Google's 42 percent increase in the first three months of this year than Yahoo's 7 percent growth.[32] I sincerely hope that Google enjoys the randomization that Microsoft is providing for them. If it proceeds, the acquisition of Yahoo by Microsoft will, I believe, be toxic for both companies, and yet another notch in Google's strength. It's a horrible idea. Microsoft has shown themselves repeatedly unable to integrate technology from acquisitions - rarely are they able to even integrate in outsiders as senior management. I'm no Yahoo fan, actually - but I think this is a bad move for both companies, and a great move in Google's favor.[24] The lack of any real strategic vision means the Yahoo acquisition will likely be a disastera war between Microsoft and the remains of Yahoo, and a war within Microsoft between the Office/Windows/XBox and Internet divisions over what Microsoft wants to be. Microsoft believes that Google is a threat to its livelihood, but had Microsoft focused on defending its core product, Google couldn't touch it.[32] At stake is Microsoft and Yahoo's ability to compete with Google as advertising worth billions continues to flood the Internet.[39] The division lost $745 million on $2.4 billion in revenue through the first nine months of the company's current fiscal year. Google made $1.3 billion on $5.2 billion in revenue in just the first three months of this year. Some analysts think Ballmer would be better off using the money he planned to spend on Yahoo to buy a basket of more nimble Internet startups that have been building loyal audiences and could help drum up more online advertising.[21]

The largest Yahoo! shareholder - with a 6.4 per cent stake valued at just over $2.3 billion - is Capital Research Global Investors, followed by Legg Mason Capital Management, which has 6.3 per cent, and Capital World Investors, which has 5.2 per cent.[19]

Shareholders would vote on the new board at Yahoo!'s next annual meeting.[31]

Yahoo's board of directors has said the offer "substantially undervalues" the California firm, insisting it is worth at least 40 dollars a share.[34] The value of Microsoft's offer, originally valued at US$44.6-billion at US$31 a share, has fallen to US$29.06 a share due to a drop in the value of Microsoft's stock.[45]

No decision has been announced. The question remains whether Microsoft will launch a hostile bid, raise its offer or withdraw its proposal.[27] Now what? Microsoft has its options. It could raise its bid, walk away, go hostile at a lower price or go hostile at the current price.[48] On the hostile front, a quarter of the 206 unsolicited bids went that route. Microsoft, for one, is weighing a proxy fight as one of its options.[50]

If you make a hostile takeover bid and then fail to follow through aggressively, your stakeholders are going to start feeling that you're not quite up to the job. Although I have to admit that it's hard to think of anyone really qualified to run Microsoft right now.[49] Candidates range from the former eHarmony CEO Jaynie Studenmund and former Nextel CEO John Chapple to the Director and Chairman at Virgin Media, James Mooney. If you're interested in some expert analysis on how a hostile takeover might play out, check out this story from Marc Andreessen where he comments on an analysis from a couple of corporate attorneys. It's a good read that starts out with a nice summary of the story to date. In the midst of all the hostile hubbub, Mary Jo Foley at her All About Microsoft blog argues that Redmond's best move is to leave the table, or risk a culture clash that would alienate large swaths of the rank-and-file at both companies.[53] The question now is whether Microsoft will give up, or attempt a hostile takeover.[53]

A Yahoo takeover also would represent by far largest acquisition in Microsoft's 33-year history.[21]

Back out completely. Microsoft is struggling with its online channelshence the bid for Yahoo in the first place. If he pulls out now, Yahoo would claim victory, and Microsoft would be in a worse position than beforestruggling with online AND the sting of failing to find a white knight.[36] Microsoft, though, has insisted there is little reason to up the ante, given Yahoo's recent financial malaise and the absence of competing bids.[21]

Just remember, Yahoo! needs Microsoft a lot more than Microsoft needs Yahoo! Microsoft can wait until all those Yahoo! employees who are getting laid off start looking for work and the Seattle area will start to look like a really nice place to live.[41] Microsoft also may be trying to hold down the price because it plans to spend a substantial sum on incentives aimed at retaining Yahoo's top executives, engineers and other key employees if it the proposed marriage goes through.[21] Yahoo has repeatedly rebuffed Microsoft's advances because it says it wants a better price.[39]

Ballmer and his cohorts at Microsoft will keep chasing Yahoo for the same reason they steal ideas from everyone else: They have none of their own.[32] News.com readers, in a poll from late last week ahead of Microsoft's Saturday deadline for Yahoo to come to the negotiating table, gave the edge to Microsoft giving up.[50] Google controls 40% of the overall online ad market while Yahoo and Microsoft's MSN have 15% and 5.2%, respectively, according to Nielsen. Microsoft fears that Google ( GOOG, Fortune 500 ), which makes most of its money from small text ads that appear next to search results, will seizer an even bigger piece of the online ad pie as MSN falls further behind.[39] As a deafening silence emanates from Sunnyvale and Redmond, the media speculation began to build on how Microsoft Corp would respond to the reluctance of Yahoo Inc to become part of the software-maker'''s empire. At this point, the media'''s consensus is that there exists no direct contact between the two sides. "There was no direct contact between the two sides this past weekend and people close to both camps said they were preparing for the next stage of battle.[48] You get people like Yahoo not taking Microsoft's threat seriously anymore. ;).[51] Instead of trying to steal and destroy YAHOO, WHY DOESN'T MICROSOFT FIX THEIR O/S and other BAD problems? People call my shop by the boat loads and cry the blues that their VISTA cursed computers refuse to work. Many have to be sent (somewhere) in an attempt to fix them.[32]

Here, Microsoft acquiring Yahoo is as big a mistake as AOL acquiring Time Warner or Daimler acquiring Chrysler.[32] Why is Microsoft taking its sweet time showing its next move in the battle for Yahoo? I suspect it is simply arranging the forces for its next attack.[32]

Thank all of you for validating my belief that Microsoft is an oversized dinosaur slowly dying for lack of vision. I hope MS does buy Yahoo because I dislike both of them and it would be a disastrous marriage to behold.[32] Isn't this called a monopoly? Microsoft already own's just about everything, why go after Yahoo, which by the way I choose over MSN. I don't understand the politics off all of this but someone needs to put a stop to this.[32]

I think Yahoo should give into Microsoft. Both the companies together would do much better than Yahoo can individually do.[48] I use Office and XP and that's it and even then I get lost. For good reasons the Apple and Google websites are simple and their products seem to work without too much issue. The winners in these battles are those companies that respect the customer and offer products that are easy to use and good value. Apple and Google typically get good press, we are all impressed by the simplicity and usefulness of their hard work. Microsoft if you understand this then the world is yours.[32] The informal poll showed that 47.4 percent believe Microsoft will walk from the deal, while 38 percent believe it will launch a proxy fight, and 14.6 percent say a tender offer.[50] One thing Ballmer and crew should note: Going hostile doesn't increase your chances of getting the deal done. Chew on this: 65 percent of the hostile group ended walking away from the deal, post proxy fight or tender offer. A slight majority of the "hostile" types who walked away, 57.6 percent, increased their offer, while the remainder did not.[50]

Of the 51 "hostile" bidders, only 4 percent landed a deal. Virtually all of those 12 bidders increased their offer, with only one keeping the price as is.[50]

North of $35. seems more reasonable for the deal tobe sanctified!! The difference between the initial offer and the final can easily be earned by the joint MICROHOO not to mention the hundreds of million dollars they can save by joining forces earlier.[35] Analysts say major investors would probably support a deal around $35 a share.[5]

Microsoft's shares (ticker: MSFT ) fell 12 cents, or 0.4 percent, to close at $28.52 Wednesday.[1] Yahoo shares ( YHOO ) gained 5 cents, or 0.2 percent, to close at $27.41.[1] Yahoo! shares closed 37 cents down yesterday at $26.43 amid fears that the impasse will not be broken soon.[15]

About 20 to 25 per cent of Yahoo! shares are estimated to be in the hands of short-term arbitrageurs, which are likely to be in favour of a bid. Jerry Yang and David Filo, the founders, neither of whom is keen on the bid, hold 10 per cent between them.[15] On average, 7 analysts surveyed by First Call/Thomson Financial expected the company to earn $0.17 per share for the quarter.[10] The company said net income for the first quarter ended March 28, 2008 rose to $18.03 million or $0.30 per share from $9.25 million or $0.15 per share in the prior year period.[10]

Excluding restructuring expenses, earnings for the first quarter was $0.31 per share compared with $0.22 per share in the prior year period.[10]

We all know how Yahoo is performing in the market;lackluster earnings, loss of market share to Google and you add recession to the equation.[35]

There would be more to share($$$). The reflux of this may be one sibling (Google) gaining more whereas the other sibling (Microsoft) recieving less than what it had. As with everything in life - its all a risk! When it's all done, and years have passed some will say it was stupid, some will say it was smart.[32] The results were in line with expectations. Microsoft's online services saw a 40% rise in sales to $843m in the quarter, but its online sales still fall far behind Google.[40]

Coffee powerhouse Starbucks reported a 28 percent drop in quarterly profits, to $108.7 million, meeting recently lowered expectations. Starbucks said charges relating to CEO Howard Schultz's efforts to reinvigorate the company weighed on profits, as did the economic slowdown and higher milk prices. ( AP in Yahoo! Finance ) The company is cutting its U.S. store openings. According to internal research, customers aren't leaving Starbucks for competitors like Dunkin' Donuts and McDonald's, they are just spending less.[6] Last week, Microsoft reported an 11% fall in quarterly profits to $4.39bn in the three months to 31 March, from $4.93bn a year earlier.[40]

Microsoft chief executive Steve Ballmer and other officials have stood firm on the price when speaking in public. [22] Much of the decision on whether to press forward resides with Ballmer. A growing number of Microsoft executives are urging him to find other ways to bolster the company's online business.[5] Looks like Microsoft's rank and file know more about the company that Ballmer does, namely that Windows/Office/XBox has nothing to do with search & advertising. I suspect the only reason Microsoft's even interested in search/advertising is that they can't stand to see another company winning in a technology-related field.[32]

First, some background. If Ballmer Co. were to walk away, by no means would they be the first. They would be taking a path that a majority of unsolicited buyers have taken after putting a bear-hug squeeze on a target company, according to stats from FactSet MergerMetrics. Since 2004 through this week, 206 unsolicited bids have been issued for U.S. public companies by a wanna-be buyer.[50] Walk away, Steve - walk away!! Leave that Yahoo turd on the ground and do something better with your company.[24]

The companies declined to comment Wednesday. Yahoo's board is slated to meet Friday to again discuss its options, a person close to the Sunnyvale, Calif. -based company said.[5] In addition to Yahoo! founder, Jerry Yang, the board consists of Roy Bostock (Yahoo!'s chairman), ber-investor Ron Burkle, Softbank Capital partner Eric Hippeau, American Media Chairman Arthur Kern, Hewlett-Packard (nyse: HPQ - news - people ) Executive Vice President Vyomesh Joshi, Activision (nasdaq: ATVI - news - people ) Chairman Robert Kotick, Northwest Airlines (nyse: NWA - news - people ) Chairman Emeritus Gary Wilson, Skyrider Chairman Ed Kozel and Citizens Communications (nyse: CZN - news - people ) CEO Maggie Wilderotter.[31] The directors gave Mr. Ballmer broad discretion to either go hostile or abandon the Yahoo pursuit, and the final outcome remained a toss-up in the wake of the meeting, the people say.[3] Aw man, I thought "talk or walk" meant Ballmer either had to keep talking 24 hours a day or quit as CEO. When they take Yahoo like Oracle did to People soft.[41] Ballmer won't give up. He'll sink both companies to get what he wants. If he continues in the way he currently is, Ballmer will scare off the engineers he desperately needs to keep at Yahoo! They're already wary as it is, and his tactics are prompting some to talk more openly about the offer.[32] Ballmer also warned that any further delays could result in a less attractive offer for Yahoo.[34]

Although Yahoo is on record as saying it is not fundamentally opposed to a sale to MS, it has always maintained that the offer price was too low.[30]

Yahoo executives and shareholders have been holding out for a higher price and refused to enter friendly talks in time for a Microsoft-imposed deadline last weekend.[2] "And our alternatives then, are to try to facilitate a transition, to possibly go directly to Yahoo shareholders. We'll see what next week brings," he added.[14]

Speaking after a speech in Milan last week, Mr Ballmer said: "We know what Yahoo! is worth to us.[19] Am I the only one to defend Mr. Ballmer? His move is bold and brilliant, if you look at MSFT's past two years activities closely,especially aQuantive and FAST acquisition. It paves the way for MSFT to continue its growth for the next 10 years. Ballmer's desire for Yahoo makes a lot sense for MSFT if we just look at how broad of Yahoo's properties and the depth of its talents in creating properties. Is this a good move for everybody else in this industry? NO. But it will position itself very strongly against Google.[32] Frustration also has mounted at Yahoo. The company's future has become the subject of avid speculation by investors and the technology industry, both because one of the Internet's top names was in play and because the result might determine whether Google Inc. gets a potentially serious challenge to its dominance.[5]

Microsoft is eager to merge the two companies' resources to take on Google, which dominates the lucrative Internet search advertising that is expected to grow to 80 billion dollars annually worldwide in the next two years.[34] I distrust Microsoft, especially after my software was stolen. They were no help. Their answer, purchase the upgrade! Too bad. I supported Microsoft products while my computer company struggled to survive, when I needed help, their suggestion was to buy more. They gave benefits to the big guys and no support to the little compaies, while charging the same to the little companies as customers who bought only one piece of their software in years.[32] Bill Gates and his company were clear on several things from the very beginning. He knew that the race didn't go to the most techically elegant software, or hardware solutions, but the ones that were "good enough". A look at the computer firms that have come and gone since Micro soft started in the mid-70s will show you this truth. Secondly, he had a vision to sell to Joe Sixpack, from the 'gitgo. He envisioned a computer running DOS/Windows in every household in America, and he damn near had that for awhile there. He knew that once you have your "good enough" software, and your vision for its dominance, then you market the hell of it, everybody else be damned. The big city pimps and drug dealers had nothing on this guy and his ruthless, monopolistic, shrewd marketing tactics when it came to browbeating PC manufacturers and OEM resellers into packaging their PCs with DOS and/or Windows, or else. You can hate Gates for his ruthlessness, and many do, but he knew that once he had established market supremacy, the rest was like shooting fish in barrel. He also has been incredibly "lucky" in having court cases go his way. It is my belief that had Microsoft been divided into two companies in the early part of this decade, Windows and its server version on one side and the Office franchise on the other, both companies would have been successful. A benefit of this proposed division would have been a more innovative and interesting technological landscape.[32]

Being swayed by new information, it goes without saying, is a good thing. It's unclear how much new information there really has been since Microsoft announced its bid. This is very much a test of leadership for Ballmer, and so far he's failing. [49] The options market is pessimistic Microsoft's bid will be accepted, with the implied probability of a deal happening "significantly lower than two months ago."[22] Many investors predicted that Microsoft would steer a middle course and nominate a slate while continuing to quietly negotiate a price. Both sides have said they were willing to make a deal -- they just haven't agreed on a price. [email protected] [email protected] Menn reported from Los Angeles, Guynn from San Francisco.[5] We've been disappointed in the speed at which the transaction went." He said Microsoft had publicly signaled what its alternatives were if the two companies failed to reach a deal by the weekend.[14] Three days after Microsoft's drop-dead deal deadline, the standoff continues.[39] Wilderotter formerly spent a couple of years as an executive at Microsoft (see "Faces Behind The Deal" ).[31]

Apparently the meeting wasn't productive at all, as the board of directors from Microsoft reportedly failed to make a decision. [20] Microsoft didn't reach a final decision following Wednesday's board meeting, according to people familiar with the matter.[3] The board emerged from the meeting without reaching a decision, The Wall Street Journal reported, citing unnamed people familiar with the matter.[21]

Yahoo is also continuing to follow up on a possible merger with Time Warner Incs AOL unit, according to people familiar with the matter, the Journal said.[33] Yahoo has continued to pursue negotiations that could lead to a merger with Time Warner Inc.' s AOL unit, say people familiar with the matter. Under such an arrangement, Time Warner would get a roughly 20% stake in Yahoo in return.[3]

Time Warner would get about a 20 percent in Yahoo if the deal is were made. This article is copyrighted by International Business Times. [33] Given MSFT cash position, being acquisitive is smart. Whether or not MS ends up with Yahoo! in its belly or not, MSFT badly needs to develop its deal structuring and execution skills and this is a perfect deal to sharpen MSFT's edge, win or lose. Once Google saw that MSFT will develop these skills, it hired Frank Quattrone.[32]

"Now perceived in India" is a rather irresponsible and unsubstantiated remark, unless you back it with data. "MS is seen as degenerating one" is another such remark - with $66bn revenue for 09 - its anything but what you just say there. Search is not the end of the world, nor is MS a one trick pony like some of its competitors you mention in the post. Its a diversified company, super keen on getting all its arms strong. It makes one wonder if Bill added in a bit of his generosity even in this deal - like he's been doing the world over.[48] Each dollar above $29 increases the total cost of the deal by about $1.3 billion.[41]

Jerry Yang, Yahoo!'s chief executive, has an indirect holding of 3.2 per cent, while David Filo, with whom Mr Yang founded the company, has 5.9 per cent. [19] In other Yahoo news, the company announced it will partner with Jajah to handle Yahoo Messenger voice calls.[53] In recent months, Yahoo has discussed a variety of tie-ups with Time Warner ( TWX, Fortune 500 ), News Corp ( NWS, Fortune 500 ). and Google.[39] Having said all that, I agree that MS and Yahoo are culturally utterly incompatible. MS needs to focus on defining exactly what OS and desktop ware means in the new millinium, rather that watching doe-eyed as Google and others define it for them.[32] Google, Yahoo, IBM, etc. are all into it. MS is perfectly aware this new paradigm may significantly impact their bread and butter, namely OS and Office.[32]

MS appointed a new Director of Scalable and Multicore Computing in December, and buying Yahoo may be part of the MS long-term strategy.[32] Yahoo may not have everything, but Windows and Office have a dim future. Thousands of people are buying new computers running Linux and millions put Linux on their existing computers to cure their malware disease.[32]

I think Bill Gates should fire Ballmer, drop all plans to buy Yahoo (yahoo is a sinkhole for MSFT cash.).[32] Last I knew, Bill Gates had not yet retired from Microsoft. Why isn't HE weighing in on this mess? Why is this Ballmer clown in charge? Microsoft without Bill Gates is (going to be) like Apple without Steve Jobs: a mess.[32] Legally, Microsoft is not Ballmer's toy. He is supposed to maximize stockholder value, not aggrandize his aging and shrinking ego. It is abundantly evident that Microsoft has very little talent for acquisitions and diversifications. Let them manage a declining business and pay out the profits in the form of dividends and permit their stockholders to make their own diversification decisions. They are likely to do better than Ballmer.[32] Three years from now, after running Microsoft into the ground by devoting all resources to the unattainable, Ballmer will retire.[32]

Microsoft's directors, who met yesterday to determine how to proceed, didn't come to a decision by the end of the day, according to the Journal.[22] Until 9AM there, NO actual decision on what will be told employees of Microsoft will be.[30] The deadline Microsoft set for going hostile passed on Saturday, and since then there have been no further negotiations between the parties.[19] Not even a key weekend deadline brought the two sides together, according to Brad Smith, software maker Microsoft's general counsel.[13]

I have seen that with my customers. Microsoft would make MORE momey if they reduced the cost because more people would pay the price to be legal and be able to call for assistance themselves rather than pay a technician who learned what to do the hard way, by finding the solution, themselves.[32] That's what happens when Microsoft let people like Apple, Google, Firefox, and Linux compete with them without snuffing them out of existence.[51] There may be other options that has been overlooked by many people, even including Microsoft itself.[32]

There are only a few thousand people who understand the back end of ad distribution, a fearsomely complicated branch of a tiny, weird sub-discipline, and Google hired all the good ones. They're like NY hedge managersthere aren't many, they're pretty easy to find, and if you have enough money you can corner the market on them, especially if nobody really thought they were valuable in the first place. Those companies cannot offer enough culture (much less money) to get them. If a competitor actually does run across a good one, Google is in great shape to steal him awayand does, again and again. Google's systems get smarter and faster the longer they run. Other companies can't catch up, since they didn't start when Google did.[32] The walk-away group is part of a larger crowd that never went hostile in trying to land a company by waging a proxy fight or tender offer.[50] Unless someone comes along with a better offer than $31 that would be as high as I would go. $35 or $40 is just pie in the sky.[35]

The stock has jumped from $19.18 before the bid was announced in February to $27.41.[40] Holding back on the hostile bid for a while could help give the share price a chance to bounce back.[46]

Ballmer has no understanding of how Yahoo's website is simple, understandable and well-designed. [32] MS is now seen as degenerating one that,despite best tech-people, is failing to come up with a search engine that can beat Google. This is no secret that thoroughly incomptent organisation like MSN will take Yahoo too down the hill alongwith it.[48]

SOURCES

1. Star-Telegram.com: | 05/01/2008 | Report: Microsoft stalled in Yahoo bid; deal in doubt
2. Report: Microsoft Directors Meet on Yahoo Deal
3. Microsoft Fails to Reach Yahoo Decision - WSJ.com
4. Yahoo bid options weighed
5. Push coming to shove for Microsoft on Yahoo - Los Angeles Times
6. Comcast'''s Mixed Bag, Microsoft'''s Hard Choice - The Week
7. Microsoft board undecided on Yahoo approach - Update : Internet Technology
8. Microsoft Board Meets, Comes to No Yahoo! Decision
9. Microsoft Undecided On Yahoo Bid - Computing News - Digital Trends
10. RTTNews - Breaking News, financial breaking News, Positive EPS Surprises, Stock research .
11. Microsoft | Microsoft reportedly mulls over next move on Yahoo | Seattle Times Newspaper
12. Report: Microsoft board meets over Yahoo bid, but doesn't decide next step
13. The Associated Press: Microsoft, Yahoo aren't talking as investors await next move
14. Microsoft deadline to Yahoo passes without a word- Hindustan Times
15. Steve Ballmer ready to demand date from Yahoo! - Times Online
16. Microsoft mulls Yahoo strategy | This is Money
17. Microsoft's board fails to decide on Yahoo: report | Reuters
18. Microsoft undecided on next move in Yahoo acquisition bid - Business
19. Microsoft plots new moves in Yahoo! war - Times Online
20. Microsoft Reportedly Undecided Over The Yahoo Deal
21. The Associated Press: Report: Microsoft board still mulling next Yahoo move
22. Microsoft might increase its bid for Yahoo - The Boston Globe
23. ITProPortal.com - Microhoo saga not over yet as Microsoft pushes price to $33 per Yahoo share
24. Tech Tracks | WSJ: Microsoft board meeting now on Yahoo, companies still separated by price | Seattle Times Newspaper Blog
25. Microsoft set to raise Yahoo! bid to $46.2bn - Times Online
26. » Microsoft considers increasing its bid for Yahoo!
27. Microsoft still isn't clear over Yahoo plan
28. New York Post
29. Microsoft-Yahoo! - Microsoft Fails To Make Up Its Mind What To Do Next @ VIRTUALIZATION JOURNAL
30. MS board mulls Yahoo options - The INQUIRER
31. Microsoft's Hostile Play - Forbes.com
32. Why Steve Ballmer Will Keep Chasing Yahoo - Bits - Technology - New York Times Blog
33. Microsoft Board Undecided about Yahoo Bid: Report - International Business Times -
34. AFP: Microsoft could nominate proxy slate of directors for Yahoo: report
35. What's Next for MicroHoo? - Seeking Alpha
36. Microsoft CEO Steve Ballmer's Yahoo Decision Could Decide His Future
37. Microsoft directors reportedly to decide on bid for Yahoo | TheNewsTribune.com | Tacoma, WA
38. Microsoft mulls proxy fight for Yahoo board: Journal - MarketWatch
39. Microsoft-Yahoo standoff continues. - Apr. 29, 2008
40. BBC NEWS | Business | Microsoft weighs options on Yahoo
41. WSJ: Microsoft Board Empowers Ballmer to Talk or Walk | Epicenter from Wired.com
42. Street Watches Microsoft And Yahoo! - Forbes.com
43. For a few dollars moreMicrosoft will get Yahoo » VentureBeat
44. Closing Glance: Internet software, services stocks waver - Forbes.com
45. Microsoft's board fails to decide on Yahoo: report
46. Microsoft plans new moves on Yahoo - Computer Business Review
47. Press TV - New bid may be offered for Microhoo
48. MediaFile » Blog Archive » Why so hostile? Next steps in Microsoft-Yahoo saga | Blogs | Reuters.com
49. Steve Ballmer, Fence-Sitter - Finance Blog - Felix Salmon - Market Movers - Portfolio.com
50. Fight or flight? Tough choice for Ballmer and crew | Tech news blog - CNET News.com
51. Electronista | No decision yet on Microsoft-Yahoo deal
52. Microsoft Board Meets, Indicates Higher Bid for Yahoo [SearchEngineWatch]
53. PC World - Microsoft to Go Hostile?
54. Microsoft considers raising Yahoo bid

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Microsoft's Board Meets on Yahoo Bid

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