updated 03:45 pm EDT, Mon July 14, 2008
Microsoft Accuses Yahoo
Microsoft today responded to Yahoo accusations that it made an 24-hour offer by rejecting many details of the story, asserting that Yahoo has distorted many of the terms discussed during the weekend. The Windows developer argues that the deal, which would see Microsoft buy out Yahoo's search business, was actually requested by Yahoo chair Roy Bostock and that Microsoft had been told Yahoo might accept a deal if Microsoft raised its bid on certain terms.
The company also directly refutes claims that the proposal would have ousted Yahoo's board and says that Yahoo misread a request to confirm the details for a deeper transaction as a "take it or leave it ultimatum" rather than the intended timetable.
Investor Carl Icahn, who is teaming with Microsoft, has partly contradicts his partner through his own letter and says that there was a timetable but that Yahoo had been offered an extension if it would delay its August 1st shareholders meeting. He also asserts that Yahoo's warnings of its entire board being replaced in the deal were exaggerated and that "a number" of board members could stay, although he still implies that Yahoo chief Jerry Yang would have to leave the CEO position.
The responses cloud the nature of negotiations and suggest an increasing hostility between Yahoo and the other two parties with Yahoo executives increasingly concerned that Icahn will successfully vote out Yahoo's board and sell some or all of the search engine giant.