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Yahoo Rejects Microsoft's Bid, Of Course--and Microsoft Responds (Of Course)

(Update: Microsoft on Monday afternoon lobs the ball back into Yahoo’s court with a content-light letter that neither mentions a counter-offer nor ups the language threat level as far as I can tell. It implies that Microsoft’s standing pat for now in public, at least, but the big question is what talks are happening in private. “The company’s next move will likely be to launch a schmoozathon aimed at winning over several of Yahoo’s big shareholders,” guesses Henry Blodget at Silicon Alley Insider. If Microsoft pushes this to a proxy fight, which would be a mess, one thing would be apparent: It’s not Yahoo’s people, execs or otherwise, that it wants, because this battle would leave people plenty of time to head for the exits. It’s hard to see why Microsoft, having come this far, wouldn’t pony up a few billion more to avoid months of strife—not to mention maybe get back some of the nearly $40 billion in market cap it has lost since the bid. Microsoft shareholders (some of whom are also Yahoo’s largest shareholders) presumably don’t want Microsoft to up its bid too much. But I suspect they may be fine with whatever offer—within reason—gets the deal done sooner than later.)

Not surprisingly, Yahoo came back this morning with a rejection of Microsoft’s $31-a-share unsolicited bid to buy the company. It sounds pretty boilerplate to me: