Microsoft Playing Hardball - Part 2

As reported in Bloomberg, and discussed earlier in this blog and elsewhere, Microsoft is finally putting the screws to Yahoo!, giving the search company three weeks to make a decision. Microsoft has furthered threatening to reduce its $44.6 billion offer, and, adding insult to injury, threatening to replace Yahoo!'s directors if they reject the negotiations. (As a side note: as good a businessman as Gates is/was, it is hard to image him taking this position, but it does not surprise me with Balmer - it must be the frantic "Dancing Ballmer" video that is still burned in my brain). If the negotiations break down, Microsoft will propose its own slate of directors and take the proposal directly to the Yahoo shareholders.

Once again, I think Jerry Yang has little choice, unless he can find a white knight from an ever shrinking pool. I am not sure anyone really wants to suit up to do battle against Microsoft in this case, even a somewhat weakened Google that would have too many anti-trust hurdles to jump over. Given that Microsoft took the NewCorp strategy (bid high enough - like in the WSJ acquisition - so that no one bothers to even consider stepping in the waters), also makes it unlikely that another bidder will appear.

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