Microsoft to Yahoo: Save last dance for me
Saturday, April 12, 2008
YAHOO Inc may have played its top two cards by pulling out possible deals with AOL and Google, but it does not seem to have changed Wall Street's view that Microsoft will eventually win the takeover battle.
Yahoo announced on Wednesday a test to outsource Web search advertising to Google Inc. Sources say the test is part of a planned three-way alliance to combine Yahoo with Time Warner Inc's AOL instead of Microsoft Corp.
But hours later, the world's largest software company appeared to trump Yahoo's announcement as the New York Times reported that Rupert Murdoch's News Corp was in talks to join Microsoft's US$42.3 billion bid for the Web pioneer.
"Everyone is just exploring. The best option is to accept the Microsoft deal," said fund manager Mike Binger at Thrivent Financial in Minneapolis, which owns small stakes in Yahoo and Microsoft.
Binger said an AOL-Yahoo merger made no sense. "I just see Yahoo as a mature brand and AOL as a declining brand," he said. As of Dec 31, Thrivent owned about 1.5 million Yahoo shares, or 0.11 per cent, and about 6.3 million Microsoft shares, or 0.07 per cent, according to regulatory filings.
The Wall Street Journal reported the Yahoo board would meet yesterday but said no big decisions were likely until at least next week. A Yahoo spokeswoman declined to comment.
A source familiar with the board's activities said that Yahoo directors meet to discuss the Microsoft offer and alternatives to it as many as three times a week.
A separate source familiar with the board's deliberations said any big decisions would likely only happen after the company's quarterly earnings report on April 22.
Yahoo shares rose nearly 3 per cent on Thursday to close at US$28.59, while Microsoft rose 0.8 per cent to US$29.11.
Microsoft's cash-and-stock offer now values Yahoo at US$29.33 per share, which the Web company rejects as too low. But before Wednesday, Yahoo appeared to have run out of alternatives to Microsoft, which threatened last weekend to lower its bid if it was not accepted within three weeks, or April 26.
Yahoo is now nearing a deal with Time Warner to fold AOL, excluding its dial-up Internet access business, into a combined company.
Reuters
Yahoo announced on Wednesday a test to outsource Web search advertising to Google Inc. Sources say the test is part of a planned three-way alliance to combine Yahoo with Time Warner Inc's AOL instead of Microsoft Corp.
But hours later, the world's largest software company appeared to trump Yahoo's announcement as the New York Times reported that Rupert Murdoch's News Corp was in talks to join Microsoft's US$42.3 billion bid for the Web pioneer.
"Everyone is just exploring. The best option is to accept the Microsoft deal," said fund manager Mike Binger at Thrivent Financial in Minneapolis, which owns small stakes in Yahoo and Microsoft.
Binger said an AOL-Yahoo merger made no sense. "I just see Yahoo as a mature brand and AOL as a declining brand," he said. As of Dec 31, Thrivent owned about 1.5 million Yahoo shares, or 0.11 per cent, and about 6.3 million Microsoft shares, or 0.07 per cent, according to regulatory filings.
The Wall Street Journal reported the Yahoo board would meet yesterday but said no big decisions were likely until at least next week. A Yahoo spokeswoman declined to comment.
A source familiar with the board's activities said that Yahoo directors meet to discuss the Microsoft offer and alternatives to it as many as three times a week.
A separate source familiar with the board's deliberations said any big decisions would likely only happen after the company's quarterly earnings report on April 22.
Yahoo shares rose nearly 3 per cent on Thursday to close at US$28.59, while Microsoft rose 0.8 per cent to US$29.11.
Microsoft's cash-and-stock offer now values Yahoo at US$29.33 per share, which the Web company rejects as too low. But before Wednesday, Yahoo appeared to have run out of alternatives to Microsoft, which threatened last weekend to lower its bid if it was not accepted within three weeks, or April 26.
Yahoo is now nearing a deal with Time Warner to fold AOL, excluding its dial-up Internet access business, into a combined company.
Reuters
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