Microsoft and Yahoo continue to circle each other like wrestlers, each waiting for the other to show its weakness before getting into a clinch. At a time like this, just about anything either side says is pure rhetoric.
That is the best interpretation of today’s report that Microsoft is ”evaluating” its bid in the light of deteriorating market conditions. This is a thinly-disguised version of the Larry Ellison treatment: soften up the target by cutting the value of a takeover offer (something Ellison did while Oracle stalked PeopleSoft) or at least threatening to (his treatment of BEA Systems.)
Like Reuters, I also talked to “people close to Microsoft” today, but I came away with the distinct feeling that not much has changed. No matter. With the arbs starting to sweat (most were probably thinking they’d have banked a nice profit on this deal by now) Yahoo’s stock has slipped 3 per cent.
Only two things are certain. One is that, whatever the rhetoric, Larry Ellison eventually ended up raising his offers to win PeopleSoft and BEA. The other is that the real negotiation between Microsoft and Yahoo will be conducted behind closed doors, not through these public posturings.
