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Feb 10 2008   11:52AM GMT

Yahoo to Microsoft: Um, no thanks

badarrow Barbara Darrow Profile: badarrow

Yahoo’s board, convinced that Microsoft is lowballing, has reportedly nixed Microsoft’s $44.6 billion buyout offer.  The Wall Street Journal reported the news over the weekend. 

Yahoo,  despite its recent woes, has great assets. The Yahoo portal still is the window to the Web for many. And its purchase of Zimbra last year gives it a slick, modern collab-and-mail combo that runs rings around competitors. Yes, even competitors with names that start with G and end with oogle.

It would be interesting to see what Microsoft, if ultimately successful, would do with Zimbra and its talent pool.

 But back to the proposed deal itself. It has painted this as a last-ditch effort by Microsoft to get in the search-Web-ad-game with Google.  After it’s already spent billions of dollars trying to get there.  And the price–while it may be low by Yahoo’s standards–is astounding.

“It’s likely we’re actually going to borrow for the first time,” Microsoft CFO Chris Liddell told analysts last week. “It’s going to be a mixture of the cash we have on hand plus debt.”

And for some, Microsoft might be better off looking ahead for the next battle rather than continuing this one. 

Some longtime Microsoft partners–both “classic” and MBS–worry that with this move shows that Microsoft’s priorities have moved far beyond them and the products they sell and support now.

One business solutions partner who works with several of the company’s ERP lines, said he thinks the company has relegated business apps for SMBs to the bottom of the heap.
He hopes that at the Microsoft Convergence confab next month he will be convinced otherwise.

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