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Microsoft Talks Tough; Proxy Battle Likely

Gates says Yahoo should 'take a hard look' at $41.6B bid

By Jim O'Neill,  Newser User

Posted Feb 20, 2008 9:53 AM CST
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(Newser) – Microsoft, at loggerheads with Yahoo over its $41.6-billion offer for the popular web portal, is talking tough, threatening a proxy battle to unseat Yahoo’s reticent board of directors, reports the Wall Street Journal. But even a win, which experts say would be relatively cheap to achieve, could cost Microsoft in the form of Yahoo employee animosity and attrition.

Microsoft investors, meanwhile, aren’t as certain that Yahoo’s as much a “must have” as is Bill Gates, who yesterday advised Yahoo to "take a hard look" at the deal; since the $31-per-share offer, Microsoft’s stock is down 14%. Yahoo yesterday rolled out enhanced severance benefits—up to two years' salary—for employees who might be laid off after a purchase, making a takeover that much more expensive for Microsoft.

This combination of two file photos shows Microsoft CEO Steve Ballmer, left, and Yahoo CEO Jerry Yang. Yahoo Inc. on Monday, Feb. 11, 2008 spurned Microsoft Corp.'s $44.6 billion takeover bid as inadequate, betting that it can elicit a higher offer from the world's largest software maker or...
This combination of two file photos shows Microsoft CEO Steve Ballmer, left, and Yahoo CEO Jerry Yang. Yahoo Inc. on Monday, Feb. 11, 2008 spurned Microsoft Corp.'s $44.6 billion takeover bid as inadequate,...   (Associated Press)
The Yahoo Center office building is seen in Santa Monica, Calif. in this Feb. 2, 2008 file photo. Yahoo Inc. on Monday, Feb. 11, 2008 spurned Microsoft Corp.'s $44.6 billion takeover bid as inadequate, betting that it can elicit a higher offer from the world's largest software maker...
The Yahoo Center office building is seen in Santa Monica, Calif. in this Feb. 2, 2008 file photo. Yahoo Inc. on Monday, Feb. 11, 2008 spurned Microsoft Corp.'s $44.6 billion takeover bid as inadequate,...   (Associated Press)
Microsoft Chairman Bill Gates waves to reporters as he leaves the Elysee Palace in Paris in this Jan. 29, 2008 file photo. Microsoft is not privately haggling with Yahoo over the software maker's rejected $31-per-share buyout offer for the slumping Internet pioneer, Gates said in an interview. (AP Photo/Remy de...
Microsoft Chairman Bill Gates waves to reporters as he leaves the Elysee Palace in Paris in this Jan. 29, 2008 file photo. Microsoft is not privately haggling with Yahoo over the software maker's rejected...   (Associated Press)
The Yahoo logo is shown on Thursday, Feb. 14, 2008 in New York. Yahoo Inc. hopes media conglomerate News Corp. can rescue it from a Microsoft Corp. takeover _ or at least prove the slumping Internet pioneer is worth more money than its unsolicited suitor wants to pay. (AP Photo/Mark...
The Yahoo logo is shown on Thursday, Feb. 14, 2008 in New York. Yahoo Inc. hopes media conglomerate News Corp. can rescue it from a Microsoft Corp. takeover _ or at least prove the slumping Internet...   (Associated Press)
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Yahoo • Microsoft • MySpace • Bill Gates • Jerry Yang • acquisition • News Corp • AT&T • proxy battle

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