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New movement in Microsoft's big Yahoo bid?

CNet News.com, citing an anonymous source, reports this morning that Microsoft and Yahoo are holding "informal merger discussions." However, the tech news site quotes another source cautioning that Microsoft would have disclosed the talks publicly if it considered them "substantive."

Six weeks have passed since Microsoft made its unsolicited, $44.6 billion bid for Yahoo. Yahoo subsequently said it believed Microsoft's offer undervalued the company. But efforts to strike an alternative deal with News Corp. didn't bear fruit. Earlier this week, Time Warner's CEO didn't explicitly rule out the possibility of a deal between its AOL unit and Yahoo. But it's not clear how AOL's $850 million acquisition of social networking service Bebo, announced this morning, might affect Time Warner's thinking about a deal or partnership with Yahoo. On that subject, see this New York Times DealBook post, which attempts to read the tea leaves.

Attention is now shifting to Yahoo's first-quarter earnings report next month. A lackluster quarter could increase the pressure on Yahoo to negotiate with Microsoft about a possible deal.

For more on that, see this post by Eric Savitz of Barron's Tech Trader Daily, summarizing Bernstein Research analyst Jeffrey Lindsay's assessment of Yahoo's options. Lindsay wrote in a note to clients: "We think they will soon be forced to accept reality and sell the company to Microsoft."

Posted by at March 13, 2008 11:41 a.m.
Category: Microsoft's Yahoo Bid

Comments

#107758

Posted by unregistered user at 3/13/08 12:43 p.m.

Yahoo CEO has nto done a very good job in managing that company. I am a Yahoo stock holder and advice Jerry Yang to give in to Microsoft offer. Microsoft has managed their company very well for all these years. Merging Yahoo with Microsoft will help both companies in terms of their sotck price.

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#107764

Posted by unregistered user at 3/13/08 1:10 p.m.

I hope MSFT withdraws their bid sending yhoo's stock price down to $14. This would make Yang reconsider. Crap MSFT might even get yhoo of 28 a share.
Rumour is yhoo is going to have another brutal quarter.

Withdraw your bid Ballmer - it will serve you better in the end

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#107769

Posted by BeenHereAWhile at 3/13/08 1:21 p.m.

Microsoft has managed their company very well for all these years.

Wow, not a Vista user, I take it, and certainly not a Microsoft employee with any experience.

Crummy products and awful corporate culture aside, let's look at the stock price, shall we? Over the last 5 years, Yahoo's stock price is up 180%, the Nasdaq composite has risen 73%, and Microsoft has risen a pitiful 21%.

You're right, it's hard to believe Yahoo management doesn't want to be part of such a successful organization.

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#108012

Posted by unregistered user at 3/14/08 9:52 a.m.

Microsoft and Yahoo met earlier this week to discuss the merger, and I would guess it's for 1 of 2 reasons: Either the Yahoo 1st quarter reports due soon don't look so great and they want to speak with Microsoft before they come out, or they are trying to fend off the now 7 lawsuits filed by shareholders for failing to negotiate in good faith with Microsoft. The writing is on the wall for Yahoo, but Jerry Yang isn't about to bow down to his arch enemy. -Microsoft's Princess (Melanie Gass)

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