14 DAY TRIAL // The Microsoft and Yahoo mating rituals have gone wild, in the sense that the Sunnyvale Internet giant is effectively fighting against a takeover and at the same time fighting with itself in order to be swallowed by the Redmond company. The architect of the failed Microsoft and Yahoo negotiations is undoubtedly Chief Executive Officer Jerry Young, who did not hesitate in allying with Google just to keep his company out of Steve Ballmer's hands. Microsoft's Chief Executive Officer has been pressuring Young to sell Yahoo since early 2007, but to no avail. On February 1, 2008 Ballmer went public with a hostile takeover bid at $31 per share, namely some $44.6 billion, and then indicated that it was ready to buy just Yahoo Search. All negotiations with Yahoo having failed, Microsoft stated that it was withdrawing its offer and that it was no longer interested in acquiring the entire Sunnyvale giant.
On July 7, the Redmond company expressed renewed interest in Yahoo, but not via Jerry Young, as investor Carl Icahn is now the main catalyst of a transaction, having debuted a proxy fight to replace the current members on Yahoo's Board of Directors which are unfavorable to a Microsoft acquisition. Both Microsoft and Carl Icahn indicated that discussions had been carried out, and that a full acquisition of Yahoo could be on the table yet again in the future, provided Jerry Young is out of the picture.
"Despite working since January 31 of this year, as well as in the early part of last year, we have never been able to reach an agreement in a timely way on acceptable terms with the current management and Board of Directors at Yahoo. We have concluded that we cannot reach an agreement with them. We confirm, however, that after the shareholder election Microsoft would be interested in discussing with a new board a major transaction with Yahoo!, such as either a transaction to purchase the 'Search' function with large financial guarantees or, in the alternative, purchasing the whole company," Microsoft revealed in a statement released following the discussions with Icahn.
By confirming negotiations with Icahn, Microsoft is effectively offering its support for the investor's proxy fight and a new Yahoo Board of Directors. In response, Yahoo underlined that Microsoft showed disinterest in a full acquisition in June, but still invited the software giant to make a new offer for the company. At the same time, Yahoo stressed the fact that Icahn is interested in nothing more than selling Yahoo, and has no actual plans for its future.
"As we explained on June 12 when Yahoo announced an agreement with Google, we believe that our proposed search acquisition and partnership would have delivered superior value to Yahoo's shareholders and the marketplace as a whole. We have not changed our position, even as we continue to move forward with our own online search and advertising offerings. We therefore welcome interest by Mr. Icahn in pursuing this and other discussions. While of course there can be no assurance of a future transaction, we will be prepared to enter into discussions immediately after Yahoo!'s shareholder meeting if a new board is elected," Microsoft added.