By Peter Whoriskey
Washington Post Staff Writer
Thursday, March 6, 2008
Yahoo said yesterday that it postponed the deadline for nominating directors, seeking time to try to fend off a $44.6 billion takeover bid from Microsoft.
Since Microsoft announced its unsolicited proposal last month, Yahoo rejected the offer and sought deals with other companies, including Time Warner, News Corp. and Google, sources close to the negotiations have said.
Hovering over those talks has been the possibility that Microsoft could swiftly scuttle them by forcing Yahoo to impanel new directors who would accept the Microsoft offer.
The nomination of directors -- an event that could mark the beginning of a prolonged fight for control of the company -- would have been due by March 14 under the previous rules. The postponement means the nominations could be delayed into the summer.
"Our objective here is to enable our board to continue to explore all of its strategic alternatives for maximizing value for stockholders without the distraction of a proxy contest," Yahoo chief executive Jerry Yang wrote to employees yesterday.
He noted, however, that just because Microsoft could delay the start of a proxy fight under the new rules doesn't mean it will.
"Microsoft, of course, could still choose to name directors," Yang said in his letter. It could also raise its proposed bid, as some analysts have suggested.
Microsoft and Google are competing for prominence and advertising in the rapidly growing world of online commerce. Each has accused the other of becoming too powerful.
Google raised antitrust questions about the proposed union of Microsoft and Yahoo, noting that such a deal would give the combined companies an "overwhelming" share of the market in instant messaging and Web e-mail accounts.
"Could the acquisition of Yahoo allow Microsoft -- despite its legacy of serious legal and regulatory offenses -- to extend unfair practices from browsers and operation systems to the Internet?" Google said in a statement released shortly after the proposed acquisition was announced.
Microsoft has opposed Google's expansion plans, specifically its proposed $3.1 billion acquisition of online advertising firm DoubleClick. Microsoft agreed with privacy advocates that the combination would put too much information about consumers under one company's control.
Microsoft has argued that the deal should be stopped before Google could amass "the largest database of user information the world has ever known."
Despite such objections, the deal was approved by the Federal Trade Commission. The European Commission has yet to rule.
"This is still an ongoing investigation, but we do not believe the transaction raises any competition concerns," said Ben Novick, a Google spokesman in London. "We hope the European Commission will come to the same conclusions as the Federal Trade Commission and clear the deal without any conditions."