Report: Microsoft board meets over Yahoo bid

April 30, 2008, 07:19 PM —  IDG News Service — 

Microsoft's board met Wednesday to decide how to proceed with the company's
bid
to acquire Yahoo
, although no final decision was reached, The Wall Street
Journal reported.

The major stumbling block in the negotiations has been the price, which Microsoft
is willing to increase to up to US$33 per share, but not to the $35 to $37 range
that major Yahoo shareholders, management and board members want, the Journal
said, citing anonymous sources. Microsoft's original cash-and-stock offer, made
on Feb. 1 and valued at $44.6 billion at the time, stood at $29.12 as of Tuesday's
market close, the paper said.

One observer suspected that Microsoft leaked the information about its latest
deliberations to help push its agenda.

"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," wrote Silicon Alley Insider's Henry Blodget in a blog
post
. "We suspect Ballmer and the board may now wait and see what impact
this leak has before making their final decision."

There was no official announcement from either company by the close of the
U.S. business day Wednesday. A spokeswoman for Microsoft said the company does
not comment on board meetings, citing company policy.

An announcement from Microsoft is now expected later in the week, the Journal
said.

Microsoft's next move is something that all parties with a stake in the deal
have been waiting for since Yahoo failed
to agree to a deal
by Saturday, the deadline Microsoft had set three weeks
earlier. Observers had expected a reaction from Microsoft on Monday morning,
but as the silence stretched into Wednesday afternoon, the media speculation
mill has gone into overdrive.

Microsoft CEO Steve Ballmer has been lobbying big Yahoo shareholders this week
so that they, in turn, will pressure the board to accept Microsoft's bid, since
Microsoft would prefer not to have to launch a hostile takeover, the Journal
reported.

In the meantime, Yahoo and Time
Warner
have continued exploring the possibility of Yahoo merging with AOL
in exchange for a 20 percent stake in Yahoo for Time Warner, the newspaper said.

In addition to attempting a hostile takeover, Microsoft has other options,
such as raising its bid to a level agreeable to Yahoo's board or walking
away
, a possibility first floated by Ballmer last week. The company may
also launch a proxy battle to replace Yahoo's board.

Certainly, Microsoft expected the acquisition process, now nearing its third
month, to flow much more smoothly and quickly, given the company's urgency to
boost its Internet unit so it can better compete against Google and capitalize
on the growth of the online advertising market.

(Additional reporting by Nancy Gohring in Seattle.)

IDG News Service

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Sidekick: The Good News & the Bad News
Either way you look at it Microsoft Data Center management did not follow standards or best practices in this failure. In which case it makes me wonder more about the outsourcing of corporate data much less personal data.
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