SUNNYVALE, California: Acutely conscious of the Microsoft pachyderm in its parlour, Yahoo seeks to gain defensive advantage any which way it can – its latest barricade being AMP, a platform it claims will reshape web advertising and boost its value in the face of the former's predatory takeover bid.
Microsoft, meantime, fired its second volley at the embattled internet portal. It arrived in the shape of an missive from ceo Steve Ballmer, made public on Saturday thereby triggering an emergency Sunday meeting of the Yahoo board.
Ballmer's broadside signaled impatience at the lack of an unambiguous answer to its unsolicited approach, implying that in the absence of a positive response Microsoft would launch a hostile bid – at a lowered price – before the month is out.
Blustered Ballmer: "If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective, which will be reflected in the terms of our proposal."
He further tightened the screw: "The public equity markets and overall economic conditions have weakened considerably [since Microsoft made its initial approach], both in general and for other internet-focused companies in particular.
"At the same time, public indicators suggest that Yahoo's search and page view shares have declined. Finally, you have adopted new plans at the company that have made any change of control more costly."
Yahoo's board rejected Ballmer's suggestion that its business is deteriorating and reiterated its belief that Microsoft's unsolicited bid is not in the best interests of Yahoo or its stockholders.
Yahoo ceo Jerry Yang and chairman Roy Bostock wrote in reply: "As a result of the decrease in your own stock price, the value of your proposal today is significantly lower than it was when you made your initial proposal."
But the duo also insisted that Yahoo is not opposed in principle to a deal with Microsoft.
AMP is an open network that covers all types of online advertising. It would, for example, enable an ad executive on the Poughkeepsie Journal to work with an advertiser to check what ad space is available on other news titles' websites and place an order accordingly. At present, such a transaction would require several phone calls or emails.
The entrail-rakers are mildly impressed, although they argue that the initiative could be "too little, too late" to ensure Yahoo's continuing independence – especially as it will take time to fly.
Says Sarah Rotman Epps of Forrester Research: "This is going to replace the legacy ad-buying platforms the publishers currently have. [But] there is going to be a gap … depending on how quickly companies move off their old platforms."
Epps also opined that in the event of a Microsoft takeover AMP's future would depend on how it measures up to the software titan's own ad platform.
"My instinct is [that] they would keep it," she says. "It's a great piece of technology that is solving a real problem. It could have a huge impact – it's so difficult for publishers to sell ads on other properties now, that they just don't do it."
Data sourced from Financial Times; additional content by WARC staff