Yahoo: What's next after Microsoft withdraws?

www.chinaview.cn 2008-05-05 11:15:55

BEIJING, May 5 (Xinhuanet) --

Yahoo Inc faced growing pressure on Sunday to find an alternative strategy to Microsoft Corp's 47.5 billion U.S. dollar takeover offer after the software maker withdrew over a disagreement on price.

Yahoo shares could fall by more than 30 percent on Monday over the breakdown of talks, but that drop could be softened if Wall Street believes Yahoo Chief Executive Jerry Yang has another strategy up his sleeve, analysts said.

Yahoo is likely to push for an advertising partnership with Web search leader Google Inc, sources familiar with the matter said.

"It's time to get a move on with Google," said Jeffrey Lindsay, analyst with Sanford C. Bernstein. "Let's hope they weren't bluffing."

Yahoo is also still considering a deal with another Internet media and advertising major, such as Time Warner Inc's AOL, people familiar with the discussions said.

"There are two things that could support the stock: the potential for Microsoft to return and the potential to do a Google deal," said Clayton Moran, analyst at Stanford Group. Moran said Yahoo shares could fall to middle to low of 20 U.S. dollars range on Monday from their 28.67 U.S. dollars close last week.

Other analysts said it could slip closer to 19.18 U.S. dollars, where it closed on Jan. 31, a day before Microsoft made its offer public.

Yang maintained that even the higher offer did not value Yahoo properly for its investment in search technology, its prominence in online display advertising and other assets.

On Sunday, Yahoo Chief Executive Jerry Yang sought to shore up that sentiment among employees."We have a spirit and a culture that is uniquely Yahoo," Yang said in an email to staff that was viewed by media. "Staying true to who we are has helped us pull through the recent uncertainty we've faced."

(Agencies)

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