Search Engine Optimization News Blog

Ouch. Just when you thought it was all over, here comes the fat lady. Microsoft, which has repeatedly told Yahoo that it is no longer interested in any sort of deal, might have been playing a deep hand.

Reportedly, in a press release from the public relations department, the Redmond company has stated flatly that it cannot reach an agreement with the current board.

OK - we knew that, right? Wait! The plot thickens. The letter goes on to read, “We confirm, however, that after the shareholder election Microsoft would be interested in discussing with a new board a major transaction with Yahoo!, such as either a transaction to purchase the ‘Search’ function with large financial guarantees or, in the alternative, purchasing the whole company.”

Say what??!!

Microsoft further reveals that they have been talking with Icahn for over a week. Icahn must be thrilled if this is the case - he was rooting for a Microsoft deal all along. Could the whole deal with Microsoft be back on the table - even as the partnership with Google lands in the bag?

Yahoo’s Jerry Yang and the current board are incensed; with less than a month until the hammer falls, Yang’s position in particular is precarious and the anger at a perceived under the table maneuver shows in the board’s reply to the news:

“Mr. Ballmer and Mr. Icahn have teamed up in an apparent effort to force Yahoo! into selling to Microsoft its Search business at a price to be determined in a future ‘negotiation’ between Mr. Icahn’s directors and Microsoft’s management.”

The response goes further to say, “We again invite them to make a proposal immediately. And if Mr. Icahn has an actual plan for Yahoo! beyond hoping that Microsoft might actually consummate a deal which they have repeatedly walked away from, we would be very interested in hearing it.”

And away we go again. Is it really a possibility that with Icahn’s puppet board calling the shots, Microsoft is seriously considering reopening negotiations? Didn’t they say a deal with Google would effectively kill their interest? Or do they have other reasons for wanting Yang gone?

Don’t forget, if Yahoo backs out of the Google partnership, it costs an extra $250 million. Is Microsoft willing to take the hit? Or even - could this be what Microsoft wanted all along? It will be worth watching to see which tune the fat lady decides to sing.