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Microsoft Steps Further Away from Yahoo: Proxy Board Let Go, WSJ Reports

Posted May 08, 2008 05:02pm EDT by Aaron Task in Investing, Internet, Venture Capital, M and A, IPOs

In another sign it has "moved on" from Yahoo (at least for now), Microsoft has released members of its potential proxy board slate from their obligations, The Wall Street Journal reports.

The action follows a string of comments from Microsoft executives indicating Saturday's decision to walk away wasn't a negotiating tactic, including these Thursday from Microsoft's Chief Research and Strategy Officer Craig Mundie: "The market may wish that the Yahoo deal may come back together, but Microsoft at least at this point assumes it's over," Reuters reports.

Mundie did leave the door open a crack, adding: "Yahoo could always come back again and say please buy us for $33 (a share) and I'm sure we might reconsider it but we're not assuming that's going to happen."

Despite speculation big shareholders like Capital Research & Management and/or Legg Mason would push Yahoo to go back to the negotiating table, Wall Street is also moving on.

After suspending coverage during the negotiations -- to avoid conflicts of interest -- Yahoo M&A advisors Goldman Sachs and Lehman Brothers have reinstated coverage on Tech Ticker's parent, Dealbook reports.

Then again, Yahoo shares were up another 2.3% to $26.22 Thursday, meaning optimistic traders either smell another deal or are whistling past the graveyard.

7 Comments

Pacific_Shogun
Pacific_Shogun - Thursday May 08, 2008 05:20PM EDT

That's what yahoo gets for putting such a high value on a sinking ship. I guess AOL will probably get a new partner soon.

Zach
Zach - Thursday May 08, 2008 05:56PM EDT

MSFT is going to wait and let Yahoo! tank and then buy it cheaper...MSFT is not dumb.

SidB
SidB - Thursday May 08, 2008 06:04PM EDT

I am so relieved that Yahoo is still Yahoo. I use it so much for finance news/email/groups/sports/flickr/pipes etc.. that I was thinking ...'There goes the neighborhood' when MS was thinking of buying them out. This is a big win for all the user community. Wall St and Investment banks are not happy and will use their media slaves to voice shock and punish yahoo for not doing this deal. They lost their lunch on this.. so gloom and doom reports are expected.. who cares.... Too all the developers at Yahoo.. I am thanking them for their efforts and hope they stay the way they are. Tie up with google/apple and look for that one amazing innovation that can bring out the next quantum leap in internet technology! Yahoo pipes.. make that into something that companies can buy and use internally...Google did that with their google appliances....

carlos
carlos - Thursday May 08, 2008 09:13PM EDT

yhoo at 33 where does masft sign $$ ?? yhoo will reach them at 35 deal closes at 34 soon yang learned his leason

SandyLady
SandyLady - Friday May 09, 2008 06:14AM EDT

It's purely a business decision on MSFT part. YHOO believes they are strong enough to weather the media wars and GOOG, so be it, wish them well, but history has proven them to be losing the war with a diminishing cash flow. When this "recession" (or whatever we will determine it to be in hindsight) clicks off, the ad spend will heat up again, and they better be ready to perform. Money buys invention and brain power so who do you think has the wherewithal to fund it? Gates is out shopping now for hungry programmers and innovators, increasing his quota on worker visas. It's a business just like any other....do you think your boss keeps you around because you're dumb and lazy? (Maybe if you're related, but that's another issue....)

Richies
Richies - Saturday May 10, 2008 07:36PM EDT

Yahoo will will down at 23-24 again, and could not gain more until one more talk between yahoo and Mircosoft. This is just the game that both party try to play one to another. Microsoft knew other party's culture and behavior in business, so Microsoft will play hard and straight to turn other party being controlled. On the contra, Yahoo also did a research to other party and play their own game to get what they want. I suspect that Yahoo and Mircosoft will be end up with merging in One technology, but long time processing. Trust me, it would be more than a year to finish the deal. For me, I would like to sell Mircosoft out, either Yahoo does if I have share with those. Wait and see, otherwise, buying yahoo for shorterm. Yahoo estimates range maximum between $25-27

Richies
Richies - Saturday May 10, 2008 07:52PM EDT

One more thing I want to say that Google is not going to let Yahoo and Mircosoft mering because of fear factor. Google will offer some good deals like better ad. and web run to Yahoo. When Yahoo agree it, Yahoo will be in jail cell that never get out. Yahoo will be lost their momentum either way. If sale to Mircosoft, Yahoo is still yahoo. If business with Google, Yahoo will be history

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