Alibaba has say in Yahoo, Microsoft talks: source
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Alibaba Group, the Chinese Internet  firm, will seek a stronger voice for its management team in  Microsoft's talks to acquire Yahoo , Alibaba's largest  shareholder, a source said on Monday.
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Yahoo has not reached a decision about Microsoft's acquisition offer, CEO Jerry Yang told employees in an e-mail today.
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Yahoo&#39;s rejection of Microsoft&#39;s acquisition bid&#160;is likely a negotiating strategy to elicit a higher offer and shouldn&#39;t be seen as an attempt to resist a deal at all costs, according to analysts.Neither Microsoft nor Yahoo has many options to improve their position in online services and advertising, and combining forces is their best bet against common rival Google, analysts said.&quot;It&#39;s part of a larger negotiation that&#39;s occurring. Clearly, Yahoo should be and is seeking a higher bid, and this is part of that process,&quot; said Clayton Moran, a financial analyst with Stanford Group.Yahoo is unlikely to find a company willing to bid as much as Microsoft for it, while Microsoft will not be able to attain its Internet goals by acquiring a company other than Yahoo. &quot;While they need to negotiate and go through the process, at the end of the day this deal will happen,&quot; Moran said.On Monday, Yahoo rejected Microsoft&#39;s bid, saying it undervalues the company. Microsoft offered to pay $31 for half of Yahoo&#39;s outstanding shares and 0.9509 of a Microsoft share for the other half. At the time of the offer, Microsoft&#39;s stock stood at $32.60 and the bid was valued at $44.6 billion, a 62 percent premium over Yahoo&#39;s stock price at the time. However, the bid&#39;s value has dropped with Microsoft&#39;s sliding stock price, which at press time was $28.10. At the same time, Yahoo&#39;s stock price has risen from a close of $19.18 on the day before the bid to $29.75 at press time.Moran predicted that Microsoft will adjust its offer so that it ends up at $35 per share, probably increasing the fixed cash portion and reducing the variable stock portion so that value is less vulnerable to Microsoft stock fluctuations. A $35-per-share offer would be a midpoint between the original bid and the $40 per share Yahoo is reportedly seeking.&quot;We continue to view a Yahoo sale to Microsoft as the most likely outcome,&quot; Citigroup financial analysts wrote in a note published Sunday after press reports over the weekend that Yahoo would reject the Microsoft bid. The rejection isn&#39;t surprising but rather is consistent with Yahoo&#39;s board job to &quot;extract maximum value&quot; for shareholders, the Citigroup analysts wrote.Yahoo has reportedly held talks with Google and AOL to explore alternatives to a Microsoft acquisition. One scenario being floated would be for Yahoo to outsource its search advertising business to Google, while another, reported Monday by The Times of London, has Yahoo and Time Warner&#39;s AOL discussing a possible merger.However, neither option would match the potential benefits of an acquisition by Microsoft, Moran said. &quot;A combined Yahoo-AOL wouldn&#39;t be particularly strong, and Yahoo&#39;s stock wouldn&#39;t react favorably to that deal,&quot; Moran said. A search partnership with Google would boost Yahoo&#39;s revenue, but it wouldn&#39;t address larger problems within the company, he said.For Moran, if Yahoo has approached AOL, it has done so probably to send a message to Microsoft that it has other options and that Microsoft has to sweeten its offer. Meanwhile, Google&#39;s intervention is probably directed at complicating and lengthening the negotiation process between Microsoft and Yahoo and thus delaying the formation of a stronger rival, Moran said.While merging with AOL is unlikely to give Yahoo the boost it needs, such a deal would probably be more palatable to Yahoo&#39;s management because Yahoo would be the strongest party in the fusion, according to industry analyst Greg Sterling of Sterling Market Intelligence.&quot;Yahoo sees its own demise in a Microsoft acquisition. My sense is that Yahoo&#39;s management believes that Yahoo&#39;s soul wouldn&#39;t survive as part of Microsoft,&quot; Sterling said.At this point, the situation is very complicated for both Microsoft and Yahoo. If Yahoo is intent on fending off Microsoft&#39;s advances at all costs, Microsoft could opt to walk away empty-handed and face a public embarrassment, or attempt a hostile takeover, which could alienate and scare away Yahoo employees it would want to retain, Sterling said.At the same time, Yahoo can&#39;t simply wave away a generous Microsoft offer if it doesn&#39;t have an alternative to it, Sterling said. &quot;There is a great deal at stake for both sides, and it&#39;s very complicated,&quot; he said.Microsoft declined to comment about Yahoo&#39;s rejection. AOL didn&#39;t immediately reply to a request for comment about its reported merger talks with Yahoo.
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Microsoft said&#160;its $44.6 billion offer to purchase Yahoo&#160;is &quot;fair&quot; and hinted that it may pursue a hostile takeover of the Internet company, according to a statement Microsoft made Monday in response to&#160;Yahoo&#39;s formal rejection of its buyout offer.In a statement, Microsoft said it&#39;s &quot;unfortunate&quot; that Yahoo &quot;has not embraced&quot; its proposal to combine the two companies, and the rejection of the offer &quot;does not change our belief in the strategic and financial merits of our proposal.&quot;The company also hinted that it may take the offer directly to Yahoo&#39;s shareholders, a move that could result in a hostile takeover.&quot;As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo&#39;s shareholders are provided with the opportunity to realize the value inherent in our proposal,&quot; Microsoft said in its statement.Earlier Monday, Yahoo formally rejected Microsoft&#39;s bid to acquire the company in a half-stock/half-cash purchase, saying it undervalued Yahoo.On Feb. 1, Microsoft offered to pay $31 per share for half of Yahoo&#39;s outstanding shares in cash -- about $22.3 billion -- and 0.9509 of a Microsoft share for the other half. Microsoft&#39;s half-cash/half-stock offer to Yahoo was valued at about $44.6 billion at the time it was made; Yahoo&#39;s share price was $19.18 at the time.However, since then Microsoft&#39;s stock has gone down while Yahoo&#39;s has risen, making the deal, under its current terms, worth less than when it was originally offered. This led to speculation that Yahoo might look for other suitors; the company is reportedly looking for about $40 per share. Yahoo&#39;s share price closed at $29.87 Monday; Microsoft&#39;s closed at $28.21.Some have speculated that Microsoft would raise its offer to the company to about $35 per share -- about midway between its original offer and Yahoo&#39;s target price -- but in its statement on Monday, the company seemed adamant about keeping the offer as it stands.&quot;We are offering shareholders superior value and the opportunity to participate in the upside of the combined company,&quot; Microsoft said. &quot;Based on conversations with stakeholders of both companies, we are confident that moving forward promptly to consummate a transaction is in the best interests of all parties.&quot;Microsoft&#39;s offer to purchase Yahoo is an attempt to join forces and improve both companies&#39; positions against Google in online advertising and services. However, many questioned both the logistical complexity and cultural differences involved in combining the companies, and there are fears that it will thwart rather than help their efforts to compete with Google.Yahoo is reportedly in talks with both AOL and Google to try to avoid being acquired by Microsoft. Analysts said Monday that Yahoo&#39;s initial rejection of the offer is more of an attempt to elicit a higher bid -- either from Microsoft or another company. If none comes, the company might decide in the future to accept Microsoft&#39;s offer as it stands, they said.
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Business & money: Online search firm Yahoo, subject to takeover interest from Microsoft, tells of rival offer from News Corp
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NEW YORK/SAN FRANCISCO  - Yahoo Inc  is in  talks on a possible deal with News Corp , but analysts  said an alternative was unlikely to emerge to rival Microsoft  Corp's  bid for Yahoo, now valued at $42.1 billion.
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Yahoo Inc's  board of  directors is to meet on Friday to discuss Microsoft Corp's   $44.6 billion buyout offer, the TechCrunch blog said,  citing unnamed sources.
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HONG KONG - China&#39;s biggest computer maker said Tuesday it is in acquisition talks with a major international technology company, a disclosure which comes amid reports it might buy IBM Corp.
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Yahoo has not reached a decision about&#160;Microsoft&#39;s acquisition offer&#160;and is considering &quot;a wide range of potential strategic alternatives,&quot; Yahoo CEO Jerry Yang said in an e-mail to employees on Wednesday.
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Yahoo Inc's board believes Microsoft Corp's unsolicited bid of $44.6 billion to acquire Yahoo "massively undervalues" the company and directors are set to reject the offer, the Wall Street Journal reported on Saturday, citing an unnamed source.
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Yahoo Inc would consider a business alliance with Google Inc as one way to rebuff a $44.6 billion takeover proposal by Microsoft, a source familiar with Yahoo's strategy said on Sunday.
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China&#39;s largest personal computer maker, Lenovo Group Ltd., said on Tuesday it was in acquisition talks with a major technology company, which a source familiar with the situation said was IBM.
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China&#39;s biggest computer maker said Tuesday it is in acquisition talks with a major international technology company, a disclosure which follows reports it might buy IBM Corp.
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Yahoo Inc's board of directors is to  meet on Friday to discuss Microsoft Corp's $44.6 billion buyout  offer, the TechCrunch blog said, citing unnamed sources.
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(InfoWorld) - A Chinese journalist jailed in part due to e-mail evidence provided by a Yahoo subsidiary plans to file a lawsuit in the U.S. against the Internet company within the next few months. "We're also trying to line up other victims for a class-action. We've been in touch with a few others, but we haven't signed anyone up yet. It's a very sensitive issue because there could be reprisals against their families," said Albert Ho, a legislator in Hong Kong and lawyer in the case, in a telephone interview. A Yahoo spokeswoman in Hong Kong could not be reached for comment. A U.S.Â civil suit against YahooÂ on behalf of Shi Tao, a Chinese journalist convicted of "divulging state secrets" by Beijing in partÂ due to an e-mail Yahoo providedÂ to Chinese authorities, will likely be filed in either New York or California, Ho said. Tao's e-mail, sent from a Yahoo account in April, 2004 to a pro-China democracy Web site in New York, contained a Beijing order for officials to be on guard for unrest and dissident activity ahead of the 15th anniversary of the Tiananmen Square massacre. Tao was sentenced to 10 years in prison. The new lawsuit would come just months after Ho filed a complaint to Hong Kong authorities against Yahoo Holdings (Hong Kong) on behalf of Tao. It also comes at a time whenÂ international pressure is increasingÂ on Internet companies to handle the private data of their users more carefully, particularly with respect to human rights. Amnesty International and Reporters Without Borders have both criticized Yahoo over the Tao incident, and a group of U.S. lawmakersÂ blasted a group of Internet companiesÂ earlier this year, including Yahoo, Google, Microsoft, and Cisco Systems, for failing to uphold free expression in China. "Internet companies should not disclose personal information that could violate the basic human rights of their users," Ho said. He said Tao, who is not a U.S. citizen, could file a lawsuit in the country under the Alien Tort Claims Act of 1789. The group has not yet decided on a U.S. law firm to retain for the case, nor would Ho divulge the specific strategy or damages the group intends to seek. The Hong Kong case remains pending because an investigation by authorities has not been finished yet, Ho said. Yahoo could face a fine, a civil lawsuit, or both if Hong Kong's Office of the Privacy Commissioner for Personal Data rules that it illegally divulged personal data used to put Tao in jail. The plaintiffs argue that Yahoo Hong Kong had no right to comply with a request from China for Tao's personal data, and requested that the office investigate the matter. Yahoo has denied any involvement in the case by its Hong Kong arm. The company has said any information provided to Chinese authorities in this case would have come from Yahoo's operations in China, rather than Hong Kong. However, Yahoo's Chinese and Hong Kong operations were both part of the same corporate entity, Yahoo Hong Kong, at that time In 2005, Alibaba.com acquired Yahoo's Chinese operations as part of a deal that saw Yahoo take a stake in the Chinese Internet company.
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Yahoo Inc's board met by telephone on Friday and discussed strategy for getting Microsoft Corp to raise its $42 billion offer for the company and the possibility of hiring Google Inc to run Yahoo's search, the Wall Street Journal said.
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Yahoo&#39;s board of directors plans to reject&#160;Microsoft&#39;s unsolicited $44.6 billion takeover bid,&#160;The Wall Street Journal reported Saturday, citing as its source &quot;a person familiar with the situation.&quot;According to the report, the source said the Yahoo board has determined that the $31-per-share offer &quot;massively&#160;undervalues&quot; the online services company. In addition, Microsoft&#39;s buyout bid doesn&#39;t take into consideration the business risks that Yahoo would be taking if it entered into an agreement that in the end might not be approved by government regulators, the source told the Journal.According to the Journal, Yahoo&#39;s board intends to send Microsoft a letter on Monday, detailing its position.A Yahoo spokeswoman declined to comment on the report today. &quot;We are not providing details on the board&#39;s review process,&quot; she wrote. &quot;Yahoo&#39;s board is carefully and thoroughly evaluating the Microsoft proposal in the context of all of the company&#39;s strategic alternatives, and will pursue the best course of action to maximize long-term value for shareholders.&quot;Microsoft, which announced its offer for Yahoo on Feb. 1, couldn&#39;t be reached for comment today. The offer is a combined cash-and-stock deal; in announcing the bid, Microsoft said Yahoo shareholders could choose to receive either cash or Microsoft stock, although it added that the total consideration would be equally split between the two forms of payment.Yesterday, published reports said that Yahoo&#39;s board was meeting to discuss the offer.Yahoo is still evaluating other options,&#160;including a search advertising partnership with Google, according to today&#39;s report by the Journal. It also may still be open to a longer negotiation with Microsoft: The Journal said it was told by the source that Yahoo would be unlikely to consider any offers below $40 per share.If so, that would require Microsoft to raise its original offer by at least 29 percent, or about $13 billion. In other words, the cost for Microsoft to become a more credible rival to Google in the search and online advertising markets could start at about $57.6 billion.Google has been doing what it can to scuttle the Microsoft takeover bid, including playing the antitrust card by asking, in a blog post by one of its executives last Monday, whether Microsoft might &quot;attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?&quot;Microsoft quickly shot back, issuing a statement saying that a combination of it and Yahoo merger would &quot;create a more competitive marketplace.&quot;(Eric Lai contributed to this story.)Computerworld is an InfoWorld affiliate.