The Yahoo and Microsoft merger process has become a waiting
game, like a vulture circling a haggard beast. After the initial frenzy
bid, the resignation
of Yahoo Chairman Terry Semel, the eventual
rejection of the offer by the board, and finally Microsoft's
hostile takeover offer to shareholders, matters have quieted
considerably. Microsoft, though constantly reaffirming its continued
belief in the merger, is content to sit and wait.
Yahoo was unable
to complete an advertising deal with Google that might have saved the
company. Meanwhile, it’s carried out a string of largely insignificant
moves such as its launch
of a new homepage service and its acquisition
of video-advertiser Maven.
Inside sources say that Microsoft plans on standing firm and will
not raise its initial offer, originally valued at $44.6B USD – half cash,
half stock -- even if it has to wait. One of the knowledgeable parties
commented anonymously, "Why would Microsoft bid against themselves? The
company sees no reason to bid against itself."
The sources requested anonymity as they were not authorized to speak on the
company's behalf. Early last month Microsoft
met with Yahoo officials and discussed the format of a potential
merger. The meeting was seen as a substantial breakthrough in the
standoff. Since that meeting, there has been little progress.
Yahoo held talks with News Corp. owner Rupert Murdoch and Time Warner Inc's AOL
division, according to inside sources. However, these talks went
virtually nowhere and Murdoch nixed any deal that would place him as a competitor
Many tech blogs speculated wildly in recent weeks that Microsoft would up its
bid. One reason they won't is because of the relative failure of a recent
road show by Yahoo's top executives, which was intended to improve confidence
among U.S. institutional investors.
Microsoft's offer currently stands at approximately $42B USD, due to declines
in Microsoft stock value.