Yahoo Inc would consider a business alliance with Google Inc as one way to rebuff a US$44.6 billion takeover proposal by Microsoft, a source familiar with Yahoo's strategy said on Sunday.
Yahoo management is considering revisiting talks it held with Google several months ago on an alliance as an alternative to Microsoft's bid, which, at US$31 a share, Yahoo management believes undervalues the company, the source said.
A second source close to Yahoo said it had received a procession of preliminary contacts by media, technology, telephone and financial companies. But the source said they were unaware whether any alternative bid was in the offing.
Few natural bidders exist beside Google that could engage in a bidding war and Google would be unlikely to win approval from antitrust regulators, some Wall Street analysts said on Friday.
Yahoo's efforts to find an alternative bidder could simply be a measure to pressure Microsoft to boost its bid, which valued Yahoo at US$44.6 billion when first announced on Friday.
Yahoo chief executive Jerry Yang (
"It's hard to look shareholders in the eye and say it doesn't make sense," Robert Doll, chief investment officer of global equities at BlackRock Inc in Princeton, New Jersey, said of Microsoft's unsolicited offer. "There won't be a whole lot of options for Yahoo."
Sanford Bernstein analyst Jeffrey Lindsay wrote in a research note that "the Microsoft bid of US$31 is very astute" because it puts pressure on Yahoo management to take actions that could unlock the underlying value of Yahoo assets, which he estimates are worth upward of US$39 to US$45 a share.
Separately, Google Inc fired back on Sunday at Microsoft Corp's bid to acquire Yahoo Inc, accusing Microsoft of seeking to extend its computer software monopoly deeper into the Internet realm.
David Drummond, a Google senior vice president and its chief legal officer, said in a blog post that the combination of Microsoft and Yahoo could undermine competition on the Web and called on policy makers to challenge the combination.
Microsoft responded to Google's arguments by saying that a merger with Yahoo would create a "compelling No. 2 competitor for Internet search and online advertising" to market leader Google.
"The alternative scenarios only lead to less competition on the Internet," Microsoft general counsel Brad Smith said in a statement.
Drummond argued that Microsoft's power stems from decades-old monopolies in Windows -- the software operating system used to control most personal computers -- and Internet Explorer, which is the dominant browser consumers used to view the Web.
Microsoft's proposed merger with Yahoo would combine the No. 1 and No. 2 suppliers of Web-based e-mail, instant messaging (IM) and portals, which act as starting points for hundreds of millions of users seeking information on the Web.
The Google executive argued in an official blog post that Microsoft could be looking to favor Microsoft and Yahoo services by pushing customers to other Web services they own instead of letting customers elect to use rival services.
"Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors' email, IM and Web-based services?" Drummond said in the blog. "Microsoft's hostile bid for Yahoo raises troubling questions. This is about more than simply a financial transaction, one company taking over another. It's about preserving the underlying principles of the Internet: openness and innovation."
In making its case for the deal during a conference call on Friday, Microsoft executives said Google -- not Microsoft -- was the one company antitrust regulators were likely to bar from buying Yahoo, based on Google's dominance in Web search.
Microsoft executives cited industry data showing Google has a 75 percent share of worldwide Web search revenue. Between them Yahoo and Microsoft attract approximately 20 percent of Web searches, Internet measurement firms data showed.
"Today, Google is the dominant search engine and advertising company on the Web," Smith said in replying to Google on Sunday. "Google has amassed about 75 percent of paid search revenues worldwide and its share continues to grow."
A person familiar with Google's thinking said the company believes Microsoft is using the same playbook it did in the 1990s to switch Windows users away from Web browser pioneer Netscape Communications to its own Internet Explorer.
"It is the same old story," the source said.
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
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