Microsoft isn’t the sort of company that takes "no" lying down (or yes for that matter — or even lies down, come to think of it). And so it should be zero surprise that the company is back, as I predicted earlier today, with a news release explaining to Yahoo the error of its non-offer-accepting ways.
It is unfortunate that Yahoo! has not embraced our full and fair proposal to combine our companies. Based on conversations with stakeholders of both companies, we are confident that moving forward promptly to consummate a transaction is in the best interests of all parties.
We are offering shareholders superior value and the opportunity to participate in the upside of the combined company. The combination also offers an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market.
A Microsoft-Yahoo! combination will create a more effective company that would provide greater value and service to our customers. Furthermore, the combination will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising.
The Yahoo! response does not change our belief in the strategic and financial merits of our proposal. As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal.
In short, Microsoft isn’t going away, and it thinks Yahoo’s board needs remedial financial and reading lessons. I still expect a sweetened counter-offer from Microsoft, but I just don’t see how thing doesn’t head speedily to a combined company conclusion.