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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

February 10, 2008 at 7:33 PM

Reports: Yahoo seeks to restart talks with AOL; MSFT may up bid

With the expectation that Yahoo will formally reject Microsoft’s $31-per-share offer Monday, it follows that the company would be chatting up other potential suitors. The Times of London is reporting that Yahoo has sought talks with AOL. The sourcing on this story is a little thin. The opening paragraph says, “the Times has learnt,” but there’s no indication on how or where. Later “a source close to Yahoo!’s thinking” tells The Times about the board’s coming rejection of the Microsoft bid and that the offer “would have to be in the 40s [per share] to start talking, and we would have to get over regulatory issues.” But no mention of whether that’s where the paper learned — er, learnt — about AOL.

From the story:

“Although Yahoo! and AOL previously failed to join forces because of differences over price, it is hoped that the urgency created by an unwelcome approach from Microsoft and an impending economic downturn will spur the two into new talks. Google, which offered support to Yahoo! when the Microsoft approach was made public, also has a 5 per cent stake in AOL.”

Also this evening, The Wall Street Journal is reporting that Microsoft “may sweeten its offer” in response to a rejection from Yahoo. “But any increase is likely to fall short of what Yahoo’s directors believe would fairly value the company … setting the stage for a protracted battle,” The Journal reports, citing people familiar with the matter.

After a poorly timed week of vacation, I am back to work on Monday covering what is looking to be a long, complicated and really interesting acquisition battle. In addition to any formal word from Yahoo, we will be checking on a presentation Monday morning by Microsoft Chairman Bill Gates to the Office System Developer Conference in San Jose, Calif., to see if he has anything to say about the acquisition.

While reading to get back up to speed this evening, I saw that Mini-Microsoft has come out against the acquisition of Yahoo in a post this afternoon.

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