Microsoft Finds Yahoo's Rejection Unfortunate

Posted on February 11, 2008

Earlier today Yahoo rejected Microsoft's offer saying it was too low - that it undervalues Yahoo. Yahoo says its Board has "carefully reviewed Microsoft's unsolicited proposal with Yahoo!’s management team and financial and legal advisors and has unanimously concluded that the proposal is not in the best interests of Yahoo! and our stockholders."

Some Flickr users are probably hoping this would be the end of it but Microsoft finds it "unfortunate" that Yahoo has not embraced their "fair" offer. They are also not giving up. The company says the rejection of its acquisition offer "does not change our belief in the strategic and financial merits of our proposal."

Microsoft also says, "As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo's shareholders are provided with the opportunity to realize the value inherent in our proposal."

Yahoo may be rejecting the offer in an effort to elicit a higher bid from Microsoft. A hostile takeover could be a difficult and costly maneuver for Microsoft to attempt. There are many theories emerging on the tech blogs and columns today as you can see on Techmeme. The Register's headline reads, "Microsoft rejects Yahoo! rejection." These two companies may be better off together as they do not appear capable of working out a deal.