Posted February 19, 2008 4:49 pm by with 11 comments

Tweet about this on TwitterShare on LinkedInShare on Google+Share on FacebookBuffer this page

Just in case you wanted to read more about Microsoft’s bid to buy Yahoo….

Rather than upping their bid to buy Yahoo, as many speculate, Bill Gates said Microsoft’s offer is firm. This came from an unrelated phone conversation yesterday. The call was about giving students free access to some of Microsoft’s software.

Gates said Microsoft’s offer of $31 a share was a fair offer that Yahoo should seriously consider. Yahoo is said to believe they are worth at least $40 per share. Meanwhile Microsoft share price has dropped 12.8 percent, weakening the stock and cash deal. Somehow Yahoo may think that other deals discussed – with the News Corporation and Time Warner – may get a better price. It’s unlikely.

Last week, Yahoo vice president Bradley Horowitz resigned to join Google. He didn’t say what his position at Google would be and refused to speculate on how the Yahoo/Microsoft deal would play out in the future. On his blog Horowitz noted: “I have no more insight into the current MSFT / YHOO discussions than any avid reader of the NYT, WSJ, etc.”

Meanwhile, the next strategy by Microsoft isn’t to raise the bid, but to stack the deck. Yahoo’s board of directors is up for nomination this year and they stated they’ll start a proxy fight. In that, Microsoft would try to persuade Yahoo shareholders to use their proxy votes (i.e. votes by one individual or institution as the authorized representative of another) to overthrow the board. They have a March 13th deadline to accomplish this.

  • Thanks for that update, I am following the developements rather keenly.

  • Are they not offering more because they think the business is of less value or because they want to extend their profit margin. One somehow imagines that it is the latter. If so, fair play to them as one needs to make as much of a killing as possible out of a business….isn’t it? And there was I thinking that microsoft was only an ethical company.

  • I wonder what Yahoo gonna do now. This become more and more interesting.

  • Zen

    I bet Yahoo! will finally budge for Micro’s offer.

  • This is all part of Bill Gates’ negotiating strategy. Borrowed from the pages of Negotiations 101. I bet Microsoft ends up with Yahoo.

  • Don’t you wish you could strong arm like the richest man in the world? Too bad the rest of us small business people don’t get to use tactics like these when we don’t get a sweetheart deal.

    I say boo to the method!

  • Why do I have the sense that the words from both sides are not to be believed at the moment? Seems like there’s a lot of posturing going on.

  • I agree Steven, its all posturing for the negotiation.

  • When a VP resigns to join the opposition smack bang in the middle of serious negotiations it must surely show a sign of no-confidence?

  • What’s the latest on Microsoft’s offer? Haven’t heard much in the past couple days.

  • Pingback: Reviewing a Perilous Transition - The News of February 2008 » Search Engine Optimization Blog()