Skip to content
Subscriber Only

The Microsoft-Yahoo! Mating Dance

Understanding the ins and outs of the brewing takeover battle requires parsing what each company saidand what each didn't

Microsoft (MSFT) isn't happy with Yahoo's (YHOO) decision to spurn its $44.6 billion takeover bid, but the software maker is going to let Yahoo! live with the consequences a while before applying added pressure.

Microsoft said as much, however politely, on Feb. 11 when it called the offer, extended on Jan. 31, "full and fair." The remarks came in response to Yahoo's earlier statement that Microsoft's bid "substantially undervalues" the company. The interchange is part of a delicate dance that, while cordial now, could soon turn hostile. "The process is following a reasonably well-known mating ritual," says Joseph Grundfest, a Stanford Law School professor and former commissioner of the Securities & Exchange Commission.