All Quiet on the Redmond Front: Yahoo! Deadline Passes

The time for Microsoft CEO Steve Ballmer to make good on his threats has come. Ballmer previously informed Yahoo! that he would seek to oust its board of directors and replace them with one more amenable to Microsoft's $44.6 hostile takeover offer if the company didn't accept its demands by this past weekend. However, the weekend came and went without any action from either side.

What Ballmer now faces is arguably the most important decision of his tenure at the helm of the software giant: Should he blitzkrieg Yahoo!'s board or should he sheepishly retreat with the excuse that Microsoft is prepared to enter an uncertain future without Yahoo!'s resources?

There are arguments to be made on both sides. Indeed, within the company there is an increasingly anxious debate about the Yahoo! purchase, which some believe is distracting at a time when Microsoft needs to be focused on its competitors. Too, Microsoft is beginning to budget its coming fiscal year, which starts July 1. The addition of Yahoo! to the mix, one way or the other, is too big an issue to ignore.

While Microsoft and Yahoo! representatives have met several times over the past month, the companies were never able to reach any common ground. Microsoft believes its offered price is fair and has publicly stated that it may very well drop the bid price if Yahoo! didn't meet the deadline of last weekend. Yahoo!, meanwhile, believes the Microsoft bid undervalues the company and won't engage in serious discussions unless Microsoft considers paying more. The two companies did not meet over the weekend at all.

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