U.S. software giant Microsoft Corp. Tuesday continued to keep silence on its bid to acquire Yahoo Inc., three days after the deadline Microsoft had given to the major internet search engine to come to an agreement.
There has been no word from both in the past few days on the potential deal worth some 44.6 billion U.S. dollars, as observers speculate that Microsoft Chief Executive Steve Ballmer is trying anew tactic in his battle to take over the Silicon Valley company.
The two companies did not meet over the weekend and are not negotiating although the deadline set earlier by Microsoft expired Saturday, said sources close to the deal.
Microsoft has indicated it could announce its next move this week. Chief Financial Officer Chris Liddell reportedly said that the company would either take its offer directly to Yahoo shareholders or walk away if Yahoo did not respond.
Now that the deadline has passed, Microsoft would have every reason to let its battle for Yahoo to turn hostile, analysts said.
Yahoo's board of directors has twice rejected Microsoft' s offer, arguing that the price undervalues the company, although the 44.6-billion-dollar offer, announced in February, was the largest acquisition effort in Microsoft's 33-year history.
Wall Street investors on Tuesday began to adjust their stock positions on fears that the deal will not be realized soon or may not happen at all. Microsoft shares slipped 1.2 percent to close at 28.64 dollars, while Yahoo was up 3.5 percent to close 27.36 dollars.
While investors believe Microsoft would not walk away from the deal, they anticipate that Yahoo shares could drop sharply if Microsoft withdraws its bid, because that would expose Yahoo to shareholder lawsuits. Yahoo's stock has jumped more than 50 percent since Microsoft made the offer.
Yahoo's board of directors "is walking on the knife's edge right now," said Anthony Sabino, a professor of law and business at St. John's University.
Microsoft could try to take control of Yahoo's board, which is up for re-election at the upcoming annual meeting, but such a move could cause the conflict to drag out for months.
Yahoo is required by law to hold its annual meeting by July 12,and nominations for the board are due 10 days after the date of the meeting is announced.
Meanwhile, industry analysts said Google would widen its lead in search advertising and internet innovation while the future of Microsoft and Yahoo remains uncertain.
Microsoft's bid to buy Yahoo is seen widely as the software giant's latest attempt to challenge Google's dominance of the lucrative online search and advertising markets.
Google has been gaining ground on rival Yahoo, which is also under pressure from the increasing popularity of such social networking websites like Myspace and Facebook.
Source: XinhuaAuthor：china business Time：2008-05-24 From：china daily
