merger

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

Updated at 5:55 AM PT to include comments from Dell.

Dell is expanding its horizons a bit further.

The PC maker plans to acquire enterprise e-mail service MessageOne for $155 million in cash, the company said early Tuesday.

Though Dell has made very few acquisitions over its two decades in business, this one isn't that much of a stretch: Austin, Texas-based MessageOne, which manages the process of archiving, e-discovery, and long-term storage of e-mail, was founded by Adam Dell, the brother of the PC maker's CEO, Michael Dell.

To ensure fairness, the company says founder and chairman … Read more

While Microsoft and Yahoo do the M&A dance, a big question lingers: which parts of Yahoo would survive if the deal were to go through?

Microsoft Chief Executive Steve Ballmer has said if his company's proposed acquisition of Yahoo goes through, the Yahoo consumer brand would live on, which could be the death knell for MSN. Microsoft has said Windows Live and Office Live brands will likely stay, but Windows Live could be winnowed down.

The brands have different strengths in different regions. While they jockey for second place to Google in the U.S. market, Yahoo … Read more

Yahoo's board has decided Microsoft's $31-per-share offer "massively undervalues" the company, according to a report in The Wall Street Journal. Yahoo is expected to formally reject Microsoft's offer, the Journal reported.

In the report, it appears Yahoo is floating the idea that it might consider an offer of at least $40 a share. I'm not in the boardroom, but all of this--the leak, the wording--sounds like more of a negotiating tactic than a final rejection.

But, if Yahoo does want to play hardball, it has bolstered its position. The report says that Yahoo has … Read more

Microsoft says it can find $1 billion in cost cuts by combining Yahoo's business with its own Internet services operation, however CEO Steve Ballmer says the Yahoo name isn't one of the things on the chopping block.

"Yahoo, the brand, will live," Ballmer told BusinessWeek.

Even if the brand lives, though, it is unclear which of Yahoo's technologies Microsoft would adopt. A merged company would have to choose among two e-mail systems, to ad platforms and two instant messaging systems, to name just a few of the many overlaps.

Microsoft has thus far offered few … Read more

The first--and so far, only--Capitol Hill committee to place a hearing about Microsoft's $44.6 billion Yahoo bid on its calendar is now postponing that event.

Just hours after word of the proposed deal emerged last Friday, the U.S. House of Representatives Judiciary Committee's antitrust task force said it planned to hold a February 8 hearing to examine "The State of Competition on the Internet," including Microsoft's Yahoo plans.

But since then, "scheduling conflicts" have intervened, forcing the panel to cancel the hearing for the moment, a Democratic aide told CNET News.… Read more

I had to chuckle at Fake Steve Jobs' analysis of the potential of the Microsoft-Yahoo deal.

"The Borg-Yahoo merger won't work," writes Fake Steve (also known as Forbes magazine's Daniel Lyons) in a blog posting. "Here's why. It's like taking the two guys who finished second and third in a 100-yard dash and tying their legs together and asking for a rematch, believing that now they'll run faster."

Scroll down to the end and you'll get another hilarious mental picture. "Imagine a circus act in which two enormous, clumsy, … Read more

A decline in Microsoft's stock in the days since its Yahoo bid was announced could make doing the deal more expensive, Wall Street analyst-turned blogger Henry Blodget noted Wednesday.

When Microsoft announced the bid on Friday, it offered $31 a share in cash or stock. Specifically, it offered Yahoo shareholders 0.9509 Microsoft shares for each Yahoo share they own.

Right now, both the exchange ratio and the cash price are fixed, meaning Microsoft is offering $31 in cash or roughly $27 in stock. Obviously, all the shareholders would want cash, but Microsoft has already specified that the deal … Read more

Yahoo co-founder and Chief Executive Jerry Yang issued another rally call to troops on Wednesday, according to a filing with the Securities and Exchange Commission.

The company-wide e-mail was Yang's second in three days. It includes not only encouragement to employees, but touts recent activities by the company that have been overshadowed by Microsoft's unsolicited $44.6 billion buyout bid.

Here's the text of Yang's Wednesday e-mail on Microsoft's merger proposal, which undoubtedly won't be his last.

Subject: Building on our strengths

yahoos --

first off, I want to thank you for the great … Read more