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April 7, 2008

Yahoo! and Microsoft Continue their "Talks"

Yahoo! and Microsoft are getting closer but the sniping continues.  Yahoo! seems reconciled to the idea of becoming a Microsoft property as long as the price is right.  So far, the Yahoo! board seems to think it's not.  Microsoft offered a combination of cash and stock for Yahoo! and with the fluctuations in Microsoft stock (down) the value drops.  Yahoo!, for its money, hasn't exactly burned up Wall Street on its own either.  Microsoft is getting impatient and has basically said it would initiate a proxy fight, likely at a lower price to take control of the company.

Yahoo! also complains that Microsoft mischaracterizes the meetings held, including two attended by Steve Ballmer.  Ballmer is quoted in his letter as saying "there has been no meaningful negotiation to conclude an agreement."  Maybe Ballmer's perspective is anything other than when Redmond officially takes over is not "meaningful."  It's always a problem when there's too much time to think about the design of the new logos and such.  From Yahoo!'s perspective it's going to be how much they can get from MS before they give up.  Stay tuned for the eventual agreement, the shareholder lawsuits, and the regulatory dances from U.S., European, and now, Chinese antitrust authorities, among others.  It's that latter part that drives Microsoft to doing the deal sooner than later.  A new administration no matter who is elected may take its time on approving mergers.

Somehow, I keep thinking that Jerry Yang is going to go to the Yahoo! public address system sometime soon and say something like this:

Attention! This is Lando Calrissian. The Empire has taken control of the city. I advise everyone to leave before more Imperial troops arrive.

More on this in the New York Times, the San Francisco Chronicle, and the Wall Street Journal.

April 7, 2008 | Permalink

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