Microsoft joins push for new Yahoo board

July 7, 2008 8:21:01 AM PDT
Microsoft Corp. threw its weight behind investor Carl Icahn's effort to oust Yahoo Inc.'s board next month, saying Monday that a successful rebellion would encourage the software maker to renew its takeover bid for Yahoo or negotiate another deal. The development gives Icahn a carrot to dangle before Yahoo shareholders as he wages a campaign to oust Yahoo's nine directors at the company's annual meeting Aug. 1.

Icahn has been arguing that a purge of the Yahoo board is the only way to salvage a deal with Microsoft - a position that the Redmond, Wash.-based software maker backed with its Monday statement.

Yahoo shares climbed $1.60, or 7.5 percent, to $22.96 in Monday's morning trading. The company had no immediate comment.

Although it stopped short of endorsing Icahn's slate of candidates, Microsoft made it clear that it didn't believe it could negotiate a deal with Yahoo's current board.

Microsoft didn't say whether it would be willing to buy Yahoo at the same price - $47.5 billion, or $33 per share - that it offered two months ago. Chief Executive Steve Ballmer withdrew that bid after Yahoo CEO Jerry Yang sought $37 per share, a height that Yahoo's stock hasn't reached in 2½ years.

After dropping its takeover bid, Microsoft tried to buy Yahoo's online search engine for $1 billion and invest another $8 billion for a 16 percent stake in Yahoo's remaining operations.

Yahoo instead opted for an online advertising partnership with rival Google Inc. that is supposed to boost its annual revenue by $800 million. That alliance faces an antitrust review by the U.S. Justice Department because Google and Yahoo combined control more than 80 percent of the U.S. search advertising market.


Load Comments