MS to Move on Yahoo Today

Microsoft could be ready to take action on its ultimatum to Yahoo as early as today, say alleged sources in touch with the Wall Street Journal. With Microsoft having remained silent since the passing of its deadline for Yahoo to accept a takeover offer, the Windows developer is now reportedly set to announce its next plan of action and has been considering multiple strategies.

One of these is to fight a slightly less aggressive proxy war, the paper claims. Rather than bypassing Yahoo's board entirely, Microsoft may nominate a set of 10 board members (with three alternatives) it deems friendly to the $31 per share takeover bid and gauge the response from shareholders. The move would increase pressure on Yahoo to accept any offers but would allow Microsoft to avoid any immediately hostile effort, which many argue could trigger employee defections and reduce the impact of the deal.

Nothing is said to be definite, according to the report. However, Microsoft CEO Steve Ballmer has commented last week that his company may walk away from the deal if Yahoo resistance continues to create significant delays.

Yahoo has also remained quiet on the matter but has so far adopted tactics that would thwart most attempts. These include delaying a shareholder's meeting and exploring deals with Google and AOL, which may force Microsoft to raise its stake, and increasing the quality of severance packages to make any job cuts or attrition from unhappy employees prohibitively expensive for the larger firm.

However, Microsoft may be prepared for the latter approach, according to court papers also obtained by the Journal. The Redmond, Washington-based company has reportedly set aside as much as $1.5 billion to try and retain Yahoo staffers to better compete against Google's search and web ad businesses.

Neither company has commented on either the court papers or assertions of an impending announcement by Microsoft.

By Electronista Staff