YAHOO REBUFFED Microsoft merger overtures last February but is more likely to say, “yes”, this time of asking.

Microsoft has published a letter from CEO Steve Ballmer stating its desire to acquire Yahoo and including the following lines:

“In February 2007, I received a letter from your Chairman indicating the view of the Yahoo! Board that “now is not the right time from the perspective of our shareholders to enter into discussions regarding an acquisition transaction.” According to that letter, the principal reason for this view was the Yahoo!
Board’s confidence in the “potential upside” if management successfully executed on a reformulated strategy based on certain operational initiatives, such as Project Panama, and a significant
organizational realignment. A year has gone by, and the competitive situation has not improved.”

Ballmer goes on to say that by teaming up, the pair stand to achieve economies of scale and expanded R&D.

Of course there are no guarantees that the deal will come off this time but Microsoft’s offer is a 62 per cent premium over current Yahoo stock value so management had better come up with a good reason to say “no thanks” this time around. µ