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Rory Cellan-Jones

Microsoft to Yahoo - talk or else...

  • Rory Cellan-Jones
  • 6 Apr 08, 08:03 GMT

There've been suggestions in recent days that Microsoft was about to give up on its bid for Yahoo, having got tired of being stonewalled -and nervous about the worsening economic outlook. Instead, Steve Ballmer has abandoned the softly softly approach and sent a letter to Yahoo's board making it clear he is now willing to play hardball.

The letter gives the board three weeks to sit down and "negotiate a definitive agreement on a combination of our companies". And then comes the ultimatum - if Yahoo does not respond then Microsoft will get heavy. It will go straight to the shareholders, attempt to get a new board elected, and - this is the bit that matters - come back with a lower bid. Or rather one which, in a rather deliciously threatening phrase ,"will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal."

Yahoo's board seem to have hoped that by unveiling various new initiatives , making cosy noises to the likes of Google, and pointedly ignoring the wolf at the door, they could persuade Microsoft to walk away quietly. But the fall in the share-price in the middle of last week as rumours of a Microsoft withdrawal began to swirl showed that this was not a pain-free strategy.

So now it looks as though Yahoo's directors have a choice - do a deal at Microsoft's current price, or convince shareholders that it's worth seeing the share price fall in the short-term because your board has a cunning plan for long-term growth. Mind you, it's also clear from Mr Ballmer's letter that Microsoft is now nervous about the economic climate in which this deal is being pursued, so there is pressure at his end too. Thankfully, for those getting a little bored by this protracted saga, it looks as though we will soon hear how it is all going to end.

Comments

I hate big corporate deals that are constantly in the eyes of the media because they just take too long and get boring. Much like the Northern Rock saga (which went on for 6 months) I can';t wait to see the end of this.

I'd love to see someone else step in here. Perhaps a certain Australian American. The internet will be a poorer place with only two big players (Microsoft and Google) slugging it out.

  • 3.
  • At 07:43 AM on 07 Apr 2008,
  • Bob Harvey wrote:

Who cares?

I stopped using Yahoo around the millennium when it became top heavy and focused more on taking money than providing a service.

And I have arranged my life so as to never give another penny to Microsoft. The present story is a perfect illustration of why they should be eschewed (including by the BBC - boycott iPlayer, folks)

Frankly, if large American exploiters of the gullible and foolish want to fall on each other like King Kong vs Godzilla, then it's nothing to do with me. Unless I get the chance to sell tickets to the match.

Well i think its about time they did this, its getting boring now waiting for Yahoo to say anything, so i think it is a good move by Microsoft to wake them up abit.

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