Yes, I know Yahoo rejected Microsoft's bid of $31 per share. But that's just standard negotiating strategy in the world of mergers and acquisitions.
Sure, Microsoft's offer - a 60% premium over the price of Yahoo's stock at the time - was designed, not only to get Yahoo's board's attention, but to back them into a corner. If no other suitors emerge - as I predicted in a prior post - it's an offer Yahoo's board can't refuse without risking shareholder litigation or revolt.
But that doesn't mean Microsoft didn't leave itself any wiggle room, and Yahoo's board knows that. They also know that this is Microsoft's big chance, perhaps its only chance, to jump to number 2 in internet search and advertising and challenge Google. That means Yahoo has some negotiating power.… Read more