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Yahoo Says 'Not So Fast' to Microsoft


Yahoo has an alert for Microsoft: not so fast. Published reports this weekend says Yahoo will reject Microsoft's $44.6 billion bid to buy the Internet search company, saying the offer is too low.

NPR's Kathy Lohr reports that Yahoo's board of directors is set to send its response to Microsoft in a letter on Monday.

KATHY LOHR: The letter going to the largest software maker is expected to say that Microsoft's offer of $31 per share massively undervalues Yahoo. Yahoo's board says it's unlikely to consider any offer below $40 per share. A source told the Wall Street Journal that the board believes Microsoft is trying to steal the company at a time when Yahoo's stock prices have been falling.

Some suggest this is a negotiating tactic and may not be a signal that Yahoo isn't really interested in a partnership in the long run. Rob Enderley(ph) is a technology analyst.

Mr. ROB ENDERLEY (Technology Analyst): Any board will not take the first offer. They need to be able to demonstrate that they got the best offer that they could get. And so it is not atypical to reject the first offer and have Microsoft come back.

LOHR: It's unclear how much higher Microsoft's offer might go. Enderley says the negotiations may take a while because regulatory issues come into question.

Mr. ENDERLEY: The Department of Justice is looking at this as well as the European Union, and they've been incredibly aggressive, particularly with regard to Microsoft over the last couple of years. So they could throw a fairly good-sized monkey wrench in this thing.

LOHR: The deal would be one of the biggest mergers in years. It has interested analysts because both Yahoo and Microsoft have fallen far behind Google in capturing the Internet search engine business. Chris Tolls is the CEO of Topic, a local online news site.

Mr. CHRIS TOLLS (CEO, Topic): I think it's atrocious that no one's been able to compete with Google. Google has done such a great job of becoming the start page of the Internet and drive so much traffic to so many people that they just have this overwhelming competitive edge over everyone else.

LOHR: Tolls says it's difficult to forecast whether the merger of Microsoft and Yahoo would be an obvious success. But he says neither should give up trying. If this deal fails it would just give a bigger edge to Google, which has already offered to step in and help Yahoo fend off Microsoft's bid.

Kathy Lohr, NPR News. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Whether covering the manhunt and eventual capture of Eric Robert Rudolph in the mountains of North Carolina, the remnants of the Oklahoma City federal building with its twisted metal frame and shattered glass, flood-ravaged Midwestern communities, or the terrorist bombings across the country, including the blast that exploded in Centennial Olympic Park in downtown Atlanta, correspondent Kathy Lohr has been at the heart of stories all across the nation.