Yahoo! to Microsoft: How cheap do you think we are?

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Yahoo! to Microsoft: How cheap do you think we are?

By Adam Myers ⋅ April 7, 2008 ⋅

Recent pen-pals Microsoft and Yahoo have had yet another exchange. As expected, the latest “Dear Steve” letter responds to Microsoft’s initial 3 week ultimatum - otherwise known as ‘take our deal or we’ll take it to your shareholders.’ It’s been rumored that the email exchanges before PR got ahold of them actually went something like this:

Steve Ballmer: Hey Jer, by banding together we can take down that evil Google. How about 44 billion and we call it a day?

Jerry Yang: Bad news Stevie, I took your unsolicitated offer to the board and they’ve agreed unanimously - the deal substantially undervalues Yahoo!

B: I’m sorry you feel that way Jer <frowny face>. Nonetheless, I’ll allow you three weeks to reconsider the deal as it actually over evaluates your company as it relates to your stock price. The 60% premium is more than generous and if you just don’t understand that, I’ll just find a different board that will!

Y: Mr Ballmer, you’re latest letter mischaracterizes the nature of our discussions with you. And you are a bully. Our board still agrees that the deal is unfair for Yahoo!, especially now that your stock price has dropped <sarcastic smile>. While I’d like to go exclusive with you, you need to bring more to this relationship or it will just never work. You can’t just go throwing money around and expecting everyone to bend over! Regardless, I hope we can still be friends.

So Microsoft, Yahoo! has called your bluff, now what? Things are about to get very interesting.

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