Advantage Yahoo: Fear of Google Brings Microsoft Back to Table

Mr. Ballmer is fighting for his corporate life. Due to luke warm response MSFT keeps extending the deadline for discounted Office upgrade to corporate customers. Earlier today Mr. Ballmer was personally promoting their products in a small European country, Hungary. Mr. Ballmer even went online on a Hungarian chat site "to answer questions" and a lucky chat room user could win Vista! Wow...

The reports of the actual events that took place are a bit confusing. Who started the exchange, YHOO or MSFT? If YHOO started, it could be nothing more than an inquiry about MSFT involvement in Ichan's proxy. Yang feels the noose around his neck and wants to know if MSFT will come back. MSFT basically answered maybe, but they will be watching the fight from the stands will be back if Ichan wins, in the meantime we can always make a side deal. If MSFT started then they are hinting to the shareholders that they are still very interested and they would welcome a new board.

They have been giving away Office and Vista for awhile, I got a copy of free Office. They really should focus on there core business, and the ventures that are already in play, like Xbox, Zune, MSN.

Aaron's analysis is way off the mark. Perhaps it's because he's a Yahoo shareholder. The truth is MSF was well aware of Yahoo's discussions with Google, and they may have influenced MSF decision to withdraw their offer. Read Balmer's veiled reference in his letter to "other matters" as an indication they were not dissuaded from walking away from the deal because of the possibility of a yahoo - Google deal in the future. MSF is clearly in the driver's seat now. If Yahoo failes to make a deal with MSF, Ichan will do so for them. MSF wants Yahoo, but only at their price with no other strings attached. They offered $33 and there's no reason why they wouldn't pay that price now for a friendly deal.

criollo2 - You raise a good question about who called who first. "Microsoft is considering and has raised with Yahoo! an alternative," says MSFT's statement but it's not clear if that's after getting a call from Yahoo and/or Carl Icahn about reviving talks for an all-out bid. However it started, I do think MSFT has provided Jerry Yang + Co. a face-saving way to return to the negotiating table, which is important given the pressure the board is under b/c of Icahn and shareholders' ire about them botching round 1. IMHO, of course. - Aaron Task

Mr. Ballmer has been a target of an egg throwing man from the audience at his appearance at the Corvinus university in Budapest, Hungary. The man, throwing eggs at Mr. Ballmer was wearing a t-shirt with the slogan Microsoft=Corruption and demanded that MSFT would return the Hungarian taxpayers money, which was used by a Microsoft initiated program, called Titan.

down to the facts its like this: MS wants and probably needs YAHOO ´cause they have nothing like it. Trying to stay in the league this aquisition is essential, otherwise they would need at least five more years-and they dont have them.Google is up and away than. Sooo ? What´s they point then saving a few $$ more ? In five years that amount will seem like peanuts.They should pay and get on to work-it´s about time 4 crying out loud.

How can Aaron take all that hand waving from Henry Fudget?

This move by Microsoft makes them look weak after their pronouncment that they had "moved on". Yahoo gains leverage and Microsoft loses leverage. Ballmer needs better reason than to just "kill Google". The better move would have been to join forces with Carl Ichan to remove the Yahoo board and then re-enter to acquire Yahoo. Also, if Microsoft was willing to pay $40+ billion for Yahoo to prop MSN ad revenue, they could have used that money to develop their own initaives.

I like how the pictures they showed in this video of Ichan and Ballmer were very unflattering. The shot of Ichan makes him look goofy and the shot of Ballmer is the typical media representation of him that makes him look like a mean barking dog. The pics of the Yahoo execs are smiling and look like the nice guys. A little media manipulation here Yahoo?

m.billings@sbcglobal.net - I missed your earlier post but I do NOT own Yahoo stock. And if you've been watching Tech Ticker since Feb. 1, I've been *very* critical of Jerry Yang + the board, probably more than I "should" be given they pay my salary. To insinuate that I'm biased in Yahoo's direction is simply not supported by the facts. Meanwhile, my recollection is the YHOO-GOOG talks cooled after MSFT walked away, UNTIL Icahn entered the picture when they "suddenly" were revived (NY Post). I think MSFT cares a lot about YHOO-GOOG and Yang + Co know this and try to take advantage (there I go again). - Aaron