Microsoft-Yahoo: Deal or no deal?

Microsoft seems to have backed away from it's tough talking

Three weeks ago, Microsoft CEO Steve Ballmer threatened to launch a hostile takeover if Yahoo 's board did not accept its US$44.6 billion takeover bid.

Now, however, Microsoft seems to have backed away from it's tough talking and said it's prepared to withdraw its offer to buy Yahoo if there is no progress by this weekend. "As we said recently to the board, unless there's progress by this weekend, we will reconsider our alternatives," said Chris Liddell, Microsoft's chief financial officer, in a conference call yesterday to discuss the company's financial results.

Yahoo did not respond to a request for comment about the deadline, but the company has said it would consider Microsoft's offer if the software giant upped the ante, which is is unlikely to happen. Microsoft declined to comment for this story.

"Although Microsoft could live without Yahoo, its perception is that acquiring Yahoo would put it in a much better position to compete against Google," said Keith Hylton, a professor at the Boston University School of Law. "So while they could live without Yahoo, it's an asset they think is pretty valuable."

While Microsoft is backpedaling a bit on its threat to take its case directly to Yahoo's shareholders, Hylton said it's his guess that Microsoft is serious about acquiring Yahoo as soon as possible and, if all else fails, every option is on the table, including a hostile takeover.

"I don't think this is something they're just going to walk away from at this stage, although there may be a stage where they walk away, like if the takeover takes too long or if there are regulatory obstacles that stand in the way," Hylton said.

On the other hand, Rob Enderle, principle analyst at Enderle Group in San Jose, said it looks like Microsoft is positioning itself to walk away instead of initiating a hostile takeover.

"The rhetoric that is coming out, especially from their CFO, says he is on the side that says we walk away from this, and the CFO gets a significant vote," Enderle said. "And clearly if you look at the internal support for this, it has dwindled within Microsoft by quite a bit, so I think at this point they're likely to walk away."

In addition, Enderle said Microsoft's latest financial results weren't where they needed to be to make this kinds of acquisition.

"The design of the bid that Microsoft put forward, as high as it was, was so it would happen quickly," Enderle said. "A hostile [takeover] would be a long, drawn out, proxy fight and antithetical to what Microsoft wanted to accomplish."

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Linda Rosencrance

Show Comments

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Luke Hill


I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?