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Microsoft increased Yahoo bids dramatically before leaving table

It just gets worse
Mon Jun 16 2008, 10:14

GUT WRENCHING news for Yahoo shareholders. Microsoft has revealed how much it had offered its board before walking away from trying another deal with the petulant company.

Not only has the Yahoo board snubbed a full take-over by Microsoft this year, Microsoft platforms and services division president Kevin Johnson said it had offered $8 billion for a 16 percent stake in Yahoo and $1 billion to buy Yahoo's search business and assume its operations.

The deal would have given Yahoo an extra $1 billion a year in operating income.

According to Reuters, Microsoft had also proposed a 10-year exclusive deal to handle Yahoo's search advertising and only guaranteed higher advertising rates for three of those years.

Yahoo favoured a deal with Google, which will pit the two companies' ads against each other in an auction, and was non-exclusive and had no guarantees of cash.

It seems that Yahoo's board, which is facing a vote of no confidence for failing to do deals with Microsoft on principle, could really be getting shareholders cross. So far this attitude seems to have cost them a small fortune. µ



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