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Steamed Microsoft CEO Steve Ballmer is ready to take on Yahoo in a proxy fight should they refuse to be assimilated into the company.
Microsoft's CEO delivers Yahoo board final ultimatum

Microsoft CEO Steve Ballmer, not typically known for being a reserved businessman, is on the verge of losing his patience with Yahoo, he announced in a letter to Yahoo's board.  Ballmer is a strong advocate of the merger, but the board despite arranging some meetings with Yahoo management and Microsoft management last month, has done little to consider the merger since rejecting Microsoft's $44.6B USD offer.

In fact the board has actively fought getting swallowed into the Microsoft empire, by acquiring additional advertising through Maven and releasing new services.  They also tried futility to broker a deal with rival Google for joint advertising.  Yahoo refuses to accept Microsoft's valuation of the company, despite the fact that it is significantly above their stock price.  Yahoo insists their company is worth substantially more.

In his letter Ballmer expressed frustration at this "limited interaction," stating that what little action the pair had was not "meaningful."  He states that this is "unfortunate."  Ballmer fumes, "Our goal in making such a generous offer was to create the basis for a speedy and ultimately friendly transaction. Despite this, the pace of the last two months has been anything but speedy."

Ballmer writes that Yahoo has two choices -- accept the offer within three weeks and prepare for the merger in earnest or face a proxy battle in which Microsoft will seek to oust the Yahoo's board of directors and replace them with a new pro-Microsoft board.

Microsoft increasing aggression in its hostile takeover attempt seems to confirm reports by analyst that Microsoft would not raise its bid, which offers a 62 percent premium on the company.  Ballmer writes angrily, "The public equity markets and overall economic conditions have weakened considerably.  At the same time, public indicators suggest that Yahoo!’s search and page view shares have declined. Finally, you have adopted new plans at the company that have made any change of control more costly."

Microsoft hopes to avoid a proxy battle, but is willing to enter one if necessary.  Such a battle would be costly both financially and to the reputation of Microsoft.  However, it would be particularly costly to Yahoo, which would be rocked by having its board deposed.  Ballmer states that if the terms are not met, the proxy battle will begin in three weeks.  Warns Ballmer, "If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company."

A Yahoo spokesman would not comment on the letter.  For the full Ballmer letter, refer here.

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M$ is similar to The Galactic Empire
By wingless on 4/6/2008 3:33:26 PM , Rating: -1
I was watching Star Wars: Episode III last night and Steve Ballmer sounds just like a Sith Lord. M$ is like the Galactic Empire and if you don't join them you will suffer. This is true for both the software side and the business side. The title of this article struck me as being Sith-like and I just had to share that with you all. For some reason I can imagine Steve and Bill in black, hooded robes recruiting and corrupting young, promising software engineers. The Linux and open source crowd are like the selfless Jedi, but they're too unorganized to defeat the First Software Empire (M$). I gotta admit though, joining M$ (the dark side) has it's benefits because you can have as much evil freedom as you want(DirectX), as long as you don't cross your master...

RE: M$ is similar to The Galactic Empire
By NordicNINE on 4/6/2008 3:41:00 PM , Rating: 2
I'm not heavy into the financial scene, but shouldn't the people that own the stock be given the choice if they want to sell?
Is that what they mean by a proxy deal?
Bypass the board and go directly to the owners of the stock?

RE: M$ is similar to The Galactic Empire
By Gul Westfale on 4/6/2008 3:42:44 PM , Rating: 2
"Ballmer To Yahoo: Join Within 3 Weeks or Suffer"

won't they suffer either way?

RE: M$ is similar to The Galactic Empire
By Omega215D on 4/6/2008 6:55:52 PM , Rating: 5
Jerry Yang: Do you really expect me to give up that easily?

Ballmer: No Mr. Yang, I expect you to die.

By cochy on 4/6/2008 11:19:13 PM , Rating: 2

By quickk on 4/7/2008 4:31:56 AM , Rating: 1
You are probably right. In that case, Ballmer should have said: "Join us withing 3 weeks and suffer."

By spluurfg on 4/7/2008 10:40:05 AM , Rating: 3
"Ballmer To Yahoo: Join Within 3 Weeks or Suffer"

won't they suffer either way?

It's probably more that the shareholders will suffer. While I'd love to have whatever Jerry Yang thinks is the fair value of Yahoo, unfortunately nobody else seems to agree with him. Given that, I'd happily take MS's premium to the market price.

By elfy6x on 4/6/2008 8:43:23 PM , Rating: 2
You are correct. A proxy vote will go out to all stockholders of Yahoo. Microsoft will have already recommended new people to replace the current board members. Assuming shareholders say yes to the new people, Microsoft will then finish its takeover of Yahoo.

RE: M$ is similar to The Galactic Empire
By stburke on 4/6/2008 3:42:42 PM , Rating: 2
Worst comparison, ever.

RE: M$ is similar to The Galactic Empire
By wordsworm on 4/6/2008 10:27:23 PM , Rating: 3
I agree. Comparing it to the Borg is a much better comparison:
The Borg have become a symbol in popular culture for any juggernaut against whom "resistance is futile."

By michael67 on 4/7/2008 4:16:31 AM , Rating: 2
"Strength is irrelevant. Resistance is futile. We wish to improve ourselves. We will add your biological and technological distinctiveness to our own. Your culture will adapt to service ours."

"I am Ballmer of Borg. Resistance is futile. Your life as it has been is over. From this time forward, you will service us."

changed Locutus to Ballmer ;-)

By maven81 on 4/7/2008 9:32:37 AM , Rating: 3
Agreed, someone completely forgot that in this online space microsoft is definitely no empire, google is. Goodle's presense on the web is several times bigger, and theyve been making inroads into microsofts territory even when it comes to OS design.
Nor are yahoo a bunch of rebels either, they are still a very big corporation, come on!

I agree that the borg is a closer metaphor if applied to google. They have slowly assimilated bits of my life, they probably know more about me then I do.

By retrospooty on 4/6/2008 4:13:39 PM , Rating: 2
Funny, I read the headline and that is exactly what I thought. LOL

By BMFPitt on 4/6/2008 6:32:49 PM , Rating: 2
Have you ever even watched Star Wars?

RE: M$ is similar to The Galactic Empire
By BladeVenom on 4/6/2008 6:55:13 PM , Rating: 2
Ballmer reminds me more of Jabba the the Hut or his pet Rancor than a Sith Lord.

RE: M$ is similar to The Galactic Empire
By theapparition on 4/7/2008 7:03:35 AM , Rating: 2
Because Ballmer reminds me more of Salacious Crumb. ;)

By marvdmartian on 4/7/2008 10:26:39 AM , Rating: 2
Actually, wouldn't the Microsoft crowd be more likely to utter something similar to "We are the BORG...."???

RE: M$ is similar to The Galactic Empire
By FITCamaro on 4/7/2008 8:41:51 AM , Rating: 4
The Linux crowd is nothing like the Jedi. The Jedi had tons of funding and flew around in bad ass ships, had cool outfits, and lightsabers. Linux guys live in their parents basements, drive around in Pinto's, and have those long, styrofoam pool toys.

RE: M$ is similar to The Galactic Empire
By Quiescent on 4/7/2008 9:46:15 AM , Rating: 3
Most of the real linux gurus have jobs that do well for them. Or they own a business. How else can they afford what they have and still have time to code the patch to a bug in linux?

Then you have the kids who use Ubuntu and think they really know something about Linux. At least I own up to not knowing crap about linux when I use Ubuntu.

I think you've mistaken the gamers for linux nerds.

By TomZ on 4/7/2008 10:21:17 AM , Rating: 2
How else can they afford what they have and still have time to code the patch to a bug in linux?

The unemployed have lots of time on their hands...

By VashHT on 4/7/2008 1:05:33 PM , Rating: 1
Nice, battle one stupid stereotype and then spit out another, makes you look really smart.

Anyway I know a lot of people at my work who game, and so do I, we all obviously have job and our own places.

"This is from the It's a science website." -- Rush Limbaugh
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