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Microsoft re-evaluating Yahoo offer

Jerry Yang, co-founder and chief executive of Yahoo Inc, stands next to a white screen as he waits to answer questions from students and the media at Georgetown University`s Healy Hall in Washington, on Thursday. Yahoo is the subject of a takeover bid by Microsoft Corp. PHOTO: AFP

A person familiar with Microsoft Corp’s bid for Yahoo Inc said on Friday the software company is re-evaluating its offer in light of the economic climate and the Internet pioneer’s deteriorating business.

The person, who asked not to be named because he was not authorized to speak publicly, said Yahoo’s share of the search market and overall conditions have deteriorated since Microsoft announced its bid on Feb. 1.

At the time, Microsoft offered US$44.6 billion, or 62 percent above Yahoo’s market value. The deal is currently valued at about US$41 billion, based on Friday’s closing share prices.

Yahoo’s board formally rejected Microsoft’s bid, saying it undervalues the company. The person familiar with Microsoft’s thinking said the company has been patient — but will be so only to a point.

“It’s up to Yahoo’s board to engage in meaningful negotiations with Microsoft,” the person said.

Senior executives of the two companies reportedly met last week near Yahoo’s Sunnyvale, California, headquarters but walked away without advancing the negotiations, the Wall Street Journal said.

Spokespeople for Microsoft and Yahoo declined to comment when asked about the meeting.

Separately, a jury ordered Microsoft on Friday to pay US$367.4 million to Alcatel-Lucent for infringing on two patents, a decision the software maker vowed to appeal.

The US District Court jury in San Diego, California, found that handwriting recognition technology in Microsoft’s Tablet PC operating system infringed on pattern recognition patents held by Paris-based Alcatel-Lucent.

The jury also decided that some of Microsoft’s programs, including the Outlook e-mail application and the Windows Mobile operating system, infringed on an Alcatel-Lucent patent in the way users select calendar dates from a menu.
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