Microsoft sets a three-week ultimatum for a Yahoo decision

Following earlier news that Microsoft was recalculating its $44.6 billion bid for Yahoo, it has become clear what the company has decided to do. Microsoft has thrown down the gauntlet, as evidenced by a letter Saturday from CEO Steve Ballmer to Yahoo's board of directors. Here's the quote that sums up the entire letter:

"If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo! board."

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This certainly is sending a strong message to Yahoo that almost nothing can be done to derail Microsoft's acquisition of the company. Rubbing salt into the wound, Microsoft adds, "It is unfortunate that by choosing not to enter into substantive negotiations with us, you have failed to give due consideration to a transaction that has tremendous benefits for Yahoo!'s shareholders and employees," in an attempt to stir up a response from Yahoo's board.

Since everything has been laid out and is now on the table, we are in for a very interesting three weeks. A hostile takeover of Yahoo would be really ugly and you can bet that Microsoft does not want to take that route, but it appears that they will if they have to.

[dbjack]

I for one wish Mr. Ballmer would leave Yahoo to their own devices, develop their own product, and focus on fixing the rampant quality problems or Vista, Office 2007, and XBOX360. Otherwise a few years from now Microsoft may be stuck where GM and Ford find themselves now; looking back and saying why did we think we could buy our way to happiness when all it would have taken was building GOOD PRODUCTS. My son is soon to be using his THIRD XBOX360 and when this one dies, and I know it will, he will get a PS3. I have rolled back to XP and Office 2003 becuase it got to the point the only way to run LOOKOUT was in SAFE MODE. So I beg you Mr. Ballmer, fix your own ship first lest it fall out from under you.

[lmasanti]

The big question is "why".
Of course, why is MS challenging Y! to go the faster way?
"If" MS is sure that it can win a "proxy contest to elect an alternative slate of directors" or that it can get an OK from "shareholders"... why will it press Y!?
Only because it is "cheaper" (or less expensive)?
Or, it is that they try (or evaluate) the "proxy contest" and voters get to ask "too much" to please MS desires? Or it is to "risky" to go --barehands-- to the shareholders' meeting?
If they take the last lane, maybe they would have to "rise the price" to be sure to win... Oh, win... And what if shareholders "say no"? (Maybe at "that" price?)
What would happen with a MS dealt down by shareholders?
(How many chairs will Ballmer throw away?)

I think that MS know that things are become quite risky now and they are trying to grip them all.
(As a side comment, something similar to the ISO standarization vote.)

[MRxINCREDIBLE]

If Microsoft buy Yahoo! I'll doubt I'll use it again. I hated My MSN, and cringe at the thought of what Microsoft will do to Yahoo! Guess I'll just have to use Google for everything.

[cadaov]

Yeah, you think Google or Yahoo are different than Microsoft?? How naive! Just wait and you'll see... Free things don't last forever.

[MCOjerry]

Why does MS want Yahoo SOOOOOO badly?

[taylor1277]

I dont understand why anyone would pay 44.6 billion for Yahoo.I use Yahoo on a everyday basis; since i first used it back in i think 1983 it has slipped downhill ever since.It keeps slipping downhill faster and faster,Ying Yang or whatever his name that came back to Yahoo as CEO to i supposedly redeem it hasn't done a thing either.Why Microsoft wants Yahoo so bad is beyond my sight,when you can just start off on your own venture with 44.6 billion and watch the day when no one wants Yahoo.Today with websites such as Myspace,30boxes.com and other websites are picking away at Yahoo like vultures.I wouldn't force Yahoo to sell,i would simply tell them take the 40 billion and by the end of the month and if they don't,they wish they would have becuase with the interest that Microsoft is showing, Yahoo thinks someone else may come along and start a bidding war.Its not going to happen other than Microsoft wanting Yahoo i would probably be the only other person that would love to put Yahoo back on the number 1 list that it kept for so many years and well i don't have the money for that and if i was Microsoft i certainly wouldn't pay a dime over 1billion for Yahoo.Yahoo sucks and look at its employees who the hell would want them,they're just sitting there doing nothing,not trying to revive Yahoo at all.I think in time and there isn't much time left that we all will say goodbye to Yahoo,it will be remebered as one of the biggest websites on the web from the first .com craze.

[Collin1000]

This is just getting sad. I think microsoft has a very "evil" sound to the name, and if there were to be a hostile takeover of yahoo, their "evilness" factor would grow 100 fold. On top of that, the strong communities like flickr would rebel and send the entire buyout into a downward spiral. And it would all start with the renaming and recoloring.