UPDATE: Microsoft Considers Hostile Takeover

The WSJ, the NYT, and others report today that Microsoft is considering a hostile takeover of Yahoo! This rumor comes after Microsoft's initial offer to buy Yahoo! outright was rejected at the offered price. Since that time, Yahoo! and Google have pursued a potential cooperative advertising strategy.

As I mentioned before, the news always covers the implications of an acquisition or a hostile takeover to the board, or maybe the shareholders and C-level employees. They don't pay as much attention to the everyday employees. In this case, its everyone including senior programmers, cafeteria workers, and maintenance crews. And this information should be important to Microsoft management--if Yahoo! employees leave out of frustration, Microsoft's value of Yahoo! is decreased. In addition, the WSJ mentions a policy Yahoo! has in place as an "anti-takeover" measure. Specifically, "Yahoo's poison-pill antitakeover defenses essentially require any would-be hostile acquirer to remove its board."

Microsoft claims to be able to enter the online advertising business without Yahoo! in their goal to compete effectively with Google, but this hostile takeover rumor hurts their credibility. Stay tuned to this story--either way it will drag out for a while.