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Microsoft leaks letter on Yahoo bid

A Microsoft executive on Friday sent workers an upbeat e-mail outlining a vision of how the software giant expects to take over Yahoo and merge the cultures and resources of the companies.

Yahoo spurned Microsoft's US$44.6 billion bid for the veteran Internet firm on Feb. 11. Microsoft is reportedly planning a hostile takeover bid if Yahoo's board of directors doesn't change its mind.

In a message to employees, Microsoft platform and services division president Kevin Johnson shared "a perspective of the process going forward."

"We look forward to a constructive dialogue with Yahoo's board, management, shareholders, and employees on the value of this combination and its strategic and financial merits," Johnson said in the message. "Once Yahoo and Microsoft agree on a transaction, we can begin the integration planning process in parallel with the regulatory review."

If Yahoo capitulates, the transaction would likely close in the second half of this year, according to Johnson.

The e-mail is a tactic from the playbook of Yahoo chief executive Jerry Yang (楊致遠), whose messages urging employees and stock holders to have faith in the company and its board have gone public after being filed with US regulators.

Johnson's missive comes on the same day that pension funds for Detroit city workers filed a civil suit charging Yahoo with betraying its duty to stockholders by resisting Microsoft's advances.

In an effort to avoid being gobbled up by Microsoft, the struggling Internet firm has reportedly explored alliances with Google, Time Warner-owned America On Line, and social networking Web site MySpace, owned by News Corp.

Some Yahoo stockholders in California are suing the firm for not accepting an offer Microsoft made to buy Yahoo early last year, when the stock price was higher.

Microsoft is currently offering a combination cash and stock deal initially valued at US$31 per share but that fluctuates with the price of Microsoft shares.

Yahoo's board is said to believe the company is worth at least US$40 per share, a price that would drive up Microsoft's cost by more than US$10 billion.

Microsoft is adamant its offer is "full and fair" and argues that the merger would create a needed and "compelling" alternative in an online search and advertising market ruled by Google.

"I have personally met with top executives of the major media companies, and I know there is a desire for more competition in search and online advertising," Johnson wrote.

Google has condemned Microsoft's takeover bid as an attack on the freedom of the Internet.

While he didn't promise a merger would not result in the elimination of redundant jobs, Johnson said Microsoft wants to hold on to top talent and is so large it could absorb people in other areas.

In an effort to keep Yahoo employees from bailing out, Johnson promised "significant rewards and compensation" will be given to workers at a combined company.

Johnson brushed aside speculation that Microsoft's historically stuffy corporate culture would clash with Yahoo's relaxed, playful California style.

"We would have an opportunity to bring together the best of both companies," Johnson wrote.

"Some aspects of the two cultures will naturally merge quickly and some will remain unique in the near-term and merge more slowly over time."
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