Yahoo Inc chief executive Jerry Yang (
"Our board is thoughtfully evaluating a wide range of potential strategic alternatives in what is a complex and evolving landscape," Yang wrote in an e-mail.
He emphasized no decision had been made on Microsoft's six-day-old bid, initially valued at US$44.6 billion, or US$31 per share.
Yang, who helped conceive Yahoo in 1994, didn't set a timetable for the Sunnyvale-based company's response, writing that the board "is going to take the time it needs to do it right."
Most of Wednesday's e-mail, filed with the Securities and Exchange Commission, tried to cheer up Yahoo's employees, many of whom are likely to lose their jobs in the months ahead, one way or the other.
Yahoo has already drawn up plans to trim 1,000 jobs from a 14,300-employee payroll in an effort to boost sagging profits. The layoffs are expected to be even more severe if Microsoft devours the company because about US$1 billion in expenses would be cut in a takeover.
And if Yahoo were to eschew Microsoft in favor of a debt-laden leveraged buyout, about 4,500 employees could be fired, according to Stifel Nicolaus analyst George Askew.
"We have a lot to be excited about and there's more good news to come," Yang wrote in his e-mail.
He cited a shake-up of Yahoo's online music service announced earlier this week and plans to unveil new products at a mobile conference in Barcelona next week.
If Yahoo rejects Microsoft, most analysts believe the company will have to line up another acquisition offer or make radical changes to satisfy disillusioned shareholders.
But most analysts doubt any other potential suitor will have the financial muscle -- or desire -- to try to outbid Microsoft, which has US$21 billion in cash and a market value of nearly US$265 billion.
Yahoo could boost its profits dramatically by turning over the responsibility of running its search engine and an adjoining advertising platform to rival Google Inc, the Internet's most prosperous company.
Google CEO Eric Schmidt has reportedly broached a potential partnership with Yang, but that alliance might be blocked by antitrust regulators worried about the competitive fallout if two of the Internet's biggest ad networks join forces. Antitrust laws almost certainly preclude Google from trumping Microsoft's bid in an attempt to buy Yahoo outright.
Former Yahoo employees who know Yang have no doubt that he is exhausting all avenues that might allow his firm to escape Microsoft's clutches.
"Jerry bleeds purple and gold [Yahoo's corporate colors]," said Rob Solomon, a former Yahoo executive who spent six years at the company before leaving in 2006.
"He always envisioned building a company that would be around for 100 years, not just 14 years," he said.
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