D-Day for Microsoft and Yahoo battle

2 May 2008 11:12 GMT / By Katie Scott

The deadline has passed, there's been days of silence but, if rumours are to be believed, the waiting may finally be over.

The Wall Street Journal has published an interview that seems to suggest that Microsoft is going to launch a hostile takeover bid for Yahoo today.

The wrangle has been heating up since February when Yahoo rejected Microsoft's $44.6 billion offer.

Since then, there have been ultimatums from Microsoft, diversion tactics from Yahoo - with rumours of possible tie-ups with Google then AOL, and finally Microsoft's CEO Steve Ballmer hinted that his company was fed-up and ready to walk away.

But after a board meeting on Wednesday, it seems the computing giant is up for a fight.

Ballmer told the newspaper: "With the right circumstances it [the takeover] will happen. Without the right circumstances it won't happen".

But he told Microsoft employees: "I will go to what I think it's worth if that gets a deal done".

And now "unnamed sources" are suggesting that Ballmer and his team are ready to go hostile, taking their offer straight to the Yahoo shareholders and launching a proxy battle which could see Yahoo's board unseated.

Online reports also suggest that Microsoft is also considering raising its bid.

In the meantime, Yahoo is getting closer to an agreement with Google to start ad sharing.

The two companies were waiting for a green light from US authorities.

The deal could bring Yahoo up to $1 billion more per year in revenue and therefore make matters more complex for Microsoft.

Full tags

Biz, Online, Websites, Yahoo, Microsoft