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If at first you don’t succeed |
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Monday, 19 May 2008 |
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New skirmish between the Beast that Blinked and the Mouse that Whored?
Microsoft is nibbling anew at the fraying corporate edges of Yahoo!. Its dual-edged incisions seem designed to exploit shareholder disquiet at Yahoo! while fending off the possibility of a deeper strategic relationship between Yahoo! and Google.
Last week, Yahoo! subdued a shareholder revolt led by ‘activist investor’ Carl Icahn, whose bedpost is host to notches such as Time Warner and Motorola. Icahn’s bid to replace the board at Yahoo! in protest at the failure to accept the last Microsoft bid for Yahoo! was met by the corporate equivalent of “go away, you silly little man.”
A close run thing, this may have reawakened Microsoft’s interest. Likewise, Yahoo!’s beleaguered board may now be more tempted to do some sort of deal, even if it falls short of the takeover mooted earlier this year. Its original defence strategy, based on a hook-up with Google, placed serious questionmarks over its long-term future, such is the extent to which Google dominates the search and online advertising markets.
Yesterday’s statement from Redmond said: “in light of developments since the withdrawal of the Microsoft proposal to acquire Yahoo! Inc., Microsoft announced that it is continuing to explore and pursue its alternatives to improve and expand its online services and advertising business. Microsoft is considering and has raised with Yahoo! an alternative that would involve a transaction with Yahoo! but not an acquisition of all of Yahoo! Microsoft is not proposing to make a new bid to acquire all of Yahoo! at this time, but reserves the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo! or discussions with shareholders of Yahoo! or Microsoft or with other third parties. There of course can be no assurance that any transaction will result from these discussions.”
Having pulled the trigger once, only to fire a blank, Microsoft may be gambling on the fact that simply pointing its well-armed gun in the direction of Yahoo! will cause the search engine tiddler to quiver with fear.
Jim Chalmers
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