Ballmer to Yahoo: OK You Don’t Want Us? We’ll Buy Someone Else

Microsoft made one thing clear on its conference call with investors this afternoon: We tech bloggers don’t have to work this weekend.

Otherwise, it offered a cliffhanger. Next week Microsoft will announce whether it will take its bid for Yahoo to its shareholders or drop it entirely.

The company had set a deadline of this Saturday for Yahoo to respond to its offer. So far, despite a few sessions of small talk between executives of the two companies, Yahoo does not appear to be in any sort of mood to get more serious.

On a European trip over the last few days, Steven A. Ballmer, Microsoft’s chief executive, has made a series of comments that the company might well abandon its bid. And Christopher P. Liddell, Microsoft’s chief financial officer, repeated the threat.

“We will provide updates, as appropriate next week,” he said, saying the company’s options “could include taking an offer to Yahoo shareholders or to withdraw our proposal and focus on other alternatives, both organic and inorganic.” (More on Microsoft’s inorganic chemistry in a minute.)

Mr. Liddell complained that Yahoo is losing value as it dithers about the deal.

“We have been clear, as evidenced by the size of our offer premium, that speed is of the essence,” he said. “Unfortunately, the transaction has been anything but speedy.”

He expressly rejected Yahoo’s arguments that it is worth more than the $31-a-share Microsoft bid.

“The strongest argument I’ve heard as to why we should increase our bid, which is that we can afford to, is not one I favor,” the chief financial officer said.

All this is to be expected, of course. Microsoft certainly has no need to hint it will pay more in absence of other bidders. And it is trying to marshal as many threats to motivate Yahoo as possible, including the prospect of a shareholder revolt when Microsoft pulls away and the possibility that Microsoft might pursue a deal with another company.

That could mean buying AOL from Time Warner, or Ask.com from IAC/Interactive. Or it could try to work out some venture with News Corporation to blend MySpace with its own properties.

All of these companies have been talking to Microsoft and Yahoo over the last three months. So it is certainly possible that a deal may emerge that doesn’t involve Yahoo at all.

http://bits.blogs.nytimes.com/2008/04/24/microsofts-new-threat-to-yahoo-
well-buy-someone-else/