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April 26, 2008 5:11 PM PDT

Is the Microhoo wedding off or just postponed?

Posted by Dan Farber

The tech world, at least the those fascinated by the mating rituals of tribes bickering over the size of the dowry, is still waiting this weekend for word from Microsoft or Yahoo on their wedding plans.

The Saturday deadline set by Steve Ballmer for the two tribes to try to resolve their differences before Microsoft shifts gears has passed with no news.

Steve Ballmer isn't agreeable to giving Jerry Yang a bigger dowry.

Yahoo and its leader, Jerry Yang, continue the holdout for more than the $31-per-share offer made on Feb. 1. Microsoft doesn't see a reason to bid against itself with no alternative bid having materialized at this point.

On Friday, Microsoft CFO Chris Liddell reiterated Microsoft's position: "We've been disappointed in the speed at which the transaction went. We put what anyone reasonable would say was an incredibly generous offer on the table to try to facilitate a speedy transaction." He added that instead of taking the case to Yahoo shareholders, Microsoft could also just walk away and return to its original "organic" strategy.

A Wall Street Journal story notes that if Microsoft walks away, Yahoo's share price would likely drop from its Friday close $26.80. Given the $31-per-share bid was made when Yahoo was at $19.18 (a 62 percent premium), Yahoo better have something up its sleeve beyond its just-announced Yahoo Open Strategy.

At this juncture, Yahoo teaming up with AOL seems the most likely alternative under consideration, but that's a far more risky path, especially with Yahoo trying to rewire both its technical platform and its user experience from the inside out and with Google continuing to increase its lead in the vital search category.

Kara Swisher is reporting that Yahoo's board might meet on Sunday and that Microsoft may decide on its ultimate strategy early next week. (See News.com's Dawn Kawamoto's story on Microsoft's options.)

Stay tuned in the coming week as the mating rituals continue, unless Microsoft decides to increase the dowry or take a walk on Sunday.

Full coverage on Microhoo

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Add a Comment (Log in or register) 7 comments (Page 1 of 1)
by ServedUp April 26, 2008 11:17 PM PDT
CNET and their blogging sensationalism, God love em, if only they wouldn't be so bias and argue for the little guy once in awhile. Yahoo's brand will survive with or without Microsoft. I can only assume thats the reason Microsoft wants Yahoo, for the brand alone. Because lets face it, Microsoft is practically a non-existent player in online search and advertising. And their strategy on acquiring Yahoo is basically a marketing ploy to attract advertisers & consumers with the hope they will be seen as a major player online. With the hope of masking Microsoft technology under a legitimate and popular internet brand name. But little do we forget, they've also tried this same strategy with their LIVE brand of products and yes with the ZUNE brand as well, by trying to create a whole different brand with the hope that it will attract some sort of cult following. But of course it remains to be seen if they've reaped what they've sowed. Obviously in respects to LIVE & their search strategy it probably hasn't worked out as planned, hence the proposed acquisition. Call me crazy but I think this was Yahoo's strategy all along to call Microsoft's bluff and its kind of bizarre & very amusing on how much this mirrors Microsoft's bid for Google way back when. Which of course was a complete failure for Microsoft. I guess their bullying business tactics, seemingly isn't working out on this one either. But its also quite amusing how CNET and their blogs always seem to argue on behalf of Microsoft by downplaying Yahoo and its legitimacy of being able to handle their own business affairs and future strategies without Microsoft being at the helm. Its obvious yes, that Yahoo is stuck in a hole. But how can anyone assume that the executives at Yahoo won't be able to figure their way out? And why assume Microsoft knows the answers? The truth of it is, yes, Yahoo is in a rut but they still have room to maneuver and last I checked are nowhere near filing for bankruptcy. Dell computer is in a rut, and yet is still managing to hold on to the top selling PC brand title, and their future strategy looks pretty bright. Apple Inc. was in a rut back in the 90s and yet with a series of carefully built strategies they're now outgrowing the overall PC industry. So give Yahoo a break already! Their destiny, is as it should be, in their OWN hands like it was from its inception. Their outlook and mind share will hold probably hold them through this troubling time at least until the next big online paradigm shift and who knows by then they could be leading the way.
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by YankeePoodle April 26, 2008 11:49 PM PDT
I think MSFT should walk away from the deal and re-visit it after two quarters. The Yahoo board's shenanigans would become crystal clear to all the investors and who knows this time MSFT can bargain Yahoo for lower price. MSFT is already paying more than the price of Yahoo, and a bitter hostile take over would certainly not help in ROI terms.
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by Tui Pohutukawa April 27, 2008 6:43 AM PDT
I just can't stand the sense of entitlement that MSFT representatives seem to have. Quite obviously, the Yahoo board doesn't want to get assimilated by MSFT. Some 50% of Yahoo's workers don't want it, the same goes for a large number of Yahoo's customers. Yet, MSFT's Mr Liddell says: "We've been disappointed in the speed at which the transaction went. We put what anyone reasonable would say was an incredibly generous offer on the table to try to facilitate a speedy transaction." He seems to think that buying an entire company is like buying a piece of candy: You walk into a shop, grab the candy and casually throw some cash onto the counter. Disgusting.
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by dhdeans April 27, 2008 7:20 AM PDT
But, in the overall scheme of things, is the outcome a moot point? "A Microsoft-Yahoo Merger Doesn't Matter" http://snipurl.com/25wpw
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by bjlevine April 27, 2008 1:42 PM PDT
Microsoft will bring to Yahoo exactly what AOL brought to Time-Warner... :D
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  • About Outside the Lines

  • Dan Farber is the editor in chief of CNET News. He has covered technology for more than two decades, and previously served as editor in chief of ZDNet, PCWeek and Macweek. Outside the Lines explores the intersection of business and technology.

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