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Though time is on Microsoft Corp. (NASDAQ: MSFT)'s side in its $44.6 billion unsolicited takeover battle for Yahoo! Inc., (NASDAQ: YHOO), that doesn't necessarily mean it will win the war.The world's largest software company late Monday said -- predictably -- it was disappointed that Yahoo "has not embraced our full and fair proposal to combine our companies" and that it was "confident that moving forward promptly to consummate a transaction is in the best interests of all parties.''
You didn't have to be psychic to see that coming.
But Yahoo co-founder and chief executive Jerry Yang isn't stupid. Microsoft, like News Corp (NYSE: NWS) in its pursuit of Dow Jones & Co. is an uneconomic buyer of Yahoo. Steve Ballmer wants to make sure that Yahoo doesn't fall into the hands of the either Google Inc. (NASDAQ: GOOG) or a media conglomerate such as Time Warner Inc. (NYSE: TWX), parent company of AOL. He has already pledged to pay a 62% premium for a company that many on Wall Street believe has seen its best days.
As Bloomberg News notes, some Yahoo shareholders are already fed up. "Eric Jackson, president of the investment firm Ironfire Capital in Naples, Florida, is organizing shareholders to support the Microsoft bid or any higher offer, according to a posting on his blog yesterday," Bloomberg reported. "He said there are 2.1 million shares in support of the move, though the count is based on an `informal pledge' by investors."
Of course, the Redmond, Wash.-based company can afford to raise its $31 per share bid for Yahoo. Analysts told The New York Times that Microsoft can afford to pay as much as $35. Whatever the price, there is no doubt that integrating Yahoo will be a huge challenge for Microsoft. But only time will tell whether Yahoo is worth all of this aggravation.
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