Yahoo Slams Microsoft's Bid Tactics as Latter Seeks Search Surrogate

02 July 2008

SUNNYVALE, California: Preparing for battle with interventionist shareholder Carl Icahn at its August 1 annual meeting, Yahoo has issued a thirty-two page defensive presentation which it hopes will outflank the corporate raider.

Icahn, irked, seeks to dismiss the firm's entire board – having fruitlessly acquired ten million Yahoo shares with options on a further 49m in the hopes of making a killing from a sucessful takeover by Microsoft.

Yahoo's pre-emptive strike doesn't pull its punches, slamming Microsoft's handling of negotiations and its "unresponsive and inconsistent" behaviour in sending mixed signals about the price it was prepared to pay.

A detailed timeline supports Yahoo's claim that it was bargaining for a better deal when Microsoft suddenly pulled out of negotiations.

This, if accurate, contradicts Icahn and other critics who have accused the Yahoo board of negotiating with a forked tongue in its bid discussions.

According to Citigroup analyst Mark Mahaney, the Yahoo timeline depicts Microsoft's actions as somewhat "bizarre", contradicting the widely-held belief that it was Yahoo that behaved irrationally.

"It is hard to see what happened here to have caused Microsoft to change its mind," said the haruspex.

Microsoft spokesman Frank Shaw dismissed the Yahoo report as  "simply revisionist history" and declined to comment.

  • Meantime, the software titan continues to limp behind Google and Yahoo in the search stakes, to remedy which it yesterday acquired San Francisco-based semantic search engine Powerset, reportedly for around $100 million (€63.38m; £50.18m).

    The done deal is likely to dramtically narrow the massive stretch of clear blue water separating Microsoft's MSN from Google and Yahoo.

    According to an article last year in Business Week 
    Powerset outperforms Google in certain cases.

    Powerset's technology enables computers to understand natural language, expressed either in keywords, phrases, or simple questions. This, the company claims, aggregates information from across multiple articles and produces more accurate results, often answering questions directly.

  • Elsewhere on Planet Microsoft, the marketing department has lifted a one-fingered salute to the legion of Windows XP enthusiasts who resolutely refuse to switch to the new Vista operating system.

    As of Monday XP will be withdrawn from retailers and mainstream computer makers. Cussed consumers who insist on having XP on their new PCs will have to buy Vista Ultimate or Vista Business and then legally 'downgrade' to XP. 

    But in a concession announced last week, Microsoft said it would extend technical support for XP through 2014, instead of 2009 as originally stated.

  • Data sourced from multiple origins; additional content by WARC staff