http://www.electronista.com/articles/08/04/07/yahoo.rejects.ms.ultimatum/

Yahoo rejects Microsoft ultimatum

Yahoo on Monday morning published a letter rebuffing Microsoft's imposed three-week deadline to accept a takeover bid, dismissing many of the claims made in the original argument. The formal rejection again states that Microsoft's $31 per share bid "substantially undervalues" Yahoo and adds that the actual value of the deal has decreased since it was suggested in late January, with Microsoft's share value having dropped while Yahoo's has increased.

Company chief Jerry Yang and chairman Roy Bostock add that Yahoo is performing in line with expectations and has no immediate need to partner with the Windows developer. A new ad system launching today should help, the executives say. They also hint that they are "exploring [their] strategic alternatives" to find what they see as the best value for the company.

Yahoo's board of directors is not averse to a deal but would require a higher offer, according to the letter.

The authors also accuse Microsoft CEO Steve Ballmer of presenting a misleading picture of actual events. In addition to refuting claims that a poor US economy is damaging Yahoo's business, Yahoo points out that Microsoft's threats of lowering its offer and beginning a proxy battle to replace the company's board with Microsoft-friendly members both contrast sharply with claims of a "friendly" offer and that negotiations have been far more active than suggested. Ballmer has had the chance to improve negotiations but has never taken advantage of the opportunity, Yahoo claims.

"Steve, you personally attended two of these meetings and could have advanced discussions in any way you saw fit," the letter notes.

Yahoo has also returned with accusations of its own and notes that Microsoft has yet to respond with details of potential regulatory issues with a takeover, including antitrust investigations that would need to be passed before any approved union. Although not explicitly mentioned in the letter, Microsoft's ownership of Yahoo would create legal difficulties for China-based Alibaba, which is concerned that Microsoft may impose more control on its business and go against Chinese guidelines.

Microsoft itself has argued that a takeover of Yahoo is necessary to prevent Google from establishing monopolies in search and web advertising.

This is quite entertaining... Basically it went like this (the latest round):

Microsoft: Hey, you're taking to long to answer, making the deal less valuable in the meantime... Either accept our offer or else... we'll LOWER it and take it to your shareholders as a hostile takeover.

Yahoo: We want a bigger offer.

So now what will Microsoft do? Make a higher offer to Yahoo's board, make a lower offer  to their shareholders, or just keep their offer and take it to the shareholders anyway?

"Microsoft itself has argued that a takeover of Yahoo is necessary to prevent Google from establishing monopolies in search and web advertising."

Well if Microsoft is so worried about that, why not give up all search engine, instant messaging, and e-mail service resources to Yahoo? Yahoo seems to be doing a better job than Microsoft in those fields. Seriously, Microsoft trying to prevent a monopoly? ROFLZONYOURWOFLZ.

Actually FOOD, this is THE sentence of the article

MS really want yahoo bad, I don't get why. Looks like ms by hook or crook will get them though.

If this Falls throught expect MS to purchase EA and Take Two!!!

I believe the $42 Billion yahoo offer is the only thing holding back MS from acquiring those two.

@gebx

That is a very interesting point. Microsoft seems intent on making a major push into the online space, and has freed up considerable assets to do so. Were they to be blocked at Yahoo they would most likely turn an eye filled with avarice to gaming. Gaming is one of the fundamental corner stones of online. One of the major reasons people go online. Hijack the access and you have a recipe for hijacking the first offering.

Microsoft might not get as much as they want by going on a developer buying spree, but what they will get is a captive audience. Were they to buy an Electronic Arts this generation would simply become academic. The same could be said for a Konami, Capcom, or Ubisoft. I am still rather shocked that they haven't made it a point to buy a major third party, and I am even more shocked that Nintendo hasn't moved in that direction yet.

Ah, that would be pretty insane...

Not sure if the rumours of EA wanting to release a console is true, but I believe that would force MS into buying them out, it would mean one less console competitor and a slew of exclusives for Windows and Xbox

I love how people love google just because their product is nice and cool... when their monopoly is actually more dangerous than any monopoly MS has ever had.....

google is basically controling the flow of information on the web... I don't know if I'm the only one but I think it's rather scary... you know personally who owns google..???? you know their political point of view ??? you know if they are good people ??

I DON'T and I'm rather worried by such a monopoly their for I do support a merging or take over between MS and yahoo... both will be stronger facing google... it's a win/win relationship we have there... just because it's MS everybody is against it.... that's so stupid... and emotion based.... with no analytical thinking...

in other words if google had announced the same as MS everybody would have been for the idea... when actually it's the opposite people should think if they want to keep a free flow of information with no monopoly or control....