Yahoo! to Microsoft and Icahn: Put up or shut up

By Stephen Withers
Tuesday, 08 July 2008 02:03

Strategy

Yahoo!'s board is getting tetchy about Microsoft's on-off courtship of the company, and with Carl Icahn's efforts as matchmaker. The latest message seems to be "show me the money!"

Since Microsoft first made an unsolicited offer for Yahoo! earlier this year, Yahoo!'s board and management has been working to keep the company going as an independent, integrated business. But mindful of their duty to shareholders, the position has always been that they would recommend acceptance if the right offer came along.

But Microsoft and Yahoo! couldn't find common ground as far as price was concerned. The Yahoo! board's idea of its company's value as an independent business exceeded the amount Microsoft was prepared to pay.

And last month, Microsoft appeared to wash its hands of the deal, with company officials saying it was no longer interested in acquiring Yahoo!, even at the price it had previously been prepared to pay.

Yet Microsoft yesterday announced that following recent talks with Icahn, "we will be prepared to enter into discussions immediately after Yahoo!’s shareholder meeting if a new board is elected." Those discussions could be aimed at a Microsoft acquisition of Yahoo!'s search business, the entire company, or some other major transaction.

The Yahoo! board seems unimpressed, challenging Microsoft to make an immediate proposal to buy the company and casting scorn on Icahn. To see exactly what Yahoo! said, please turn to page 2.