Kara Swisher

Recent Posts by Kara Swisher

Could Microsoft Lower Its Bid?

So, for the last week or so since Yahoo rejected Microsoft’s unsolicited bid of $31 a share as too low, all has been relatively quiet on the Western front.

Sure, Yahoo (YHOO) continued its tango with News Corp.’s Rupert Murdoch (lots of those dramatic cross-country flights to meet in secret, like they were rendezvousing at Hernando’s Hideaway, details of which somehow always get leaked to the press).

In turn, while threatening a proxy fight, Microsoft (MSFT) trotted out its execs–including its iconic Chairman Bill Gates–to restate that its offer was “fair” and leaked its own internal memos, including emails from top brass to company minions.

So, one wonders, what could get this party started?

Well, for one, the looming March 13 date by which Microsoft might wage that proxy battle by naming its own board (including some high-profile tech figures it is looking for in Silicon Valley, as we reported here) could add some frisson to the situation soon.

But, what if, before that, Microsoft actually lowered its bid? It is not such an unlikely idea, according to many sources close to the situation.


That’s especially possible after Yahoo’s share of the search market showed continued weakness last week, even as the number of searches went up. According to comScore results last week, the second-ranked Yahoo clocked in with a 22.2% share of the market in January, down from 22.9% in December.

“The pressures are going to get worse,” said one person. “Time is not on Yahoo’s side.”

Indeed, if signs of business weakness at Yahoo worsen, several people suggested to me that Microsoft should make a slightly lower offer for Yahoo and promise the difference between its old bid and new one to Yahoo employees as a rich retention plan.

Is it such a crazy idea? BoomTown can tell you Microsoft execs had to have been annoyed when Yahoo rolled out a pricey severance plan last week to all its employees, as was first reported here.

The plan could cost Microsoft billions of dollars, if the company wins the Yahoo fight and lays off employees as part of the deal. Sources told me Microsoft execs thought it a stunt by Yahoo and not a very funny one at that.

And we need some fun right about now, don’t you think? So to start off the week right, here’s that infectious Pink video of her hit “Get the Party Started,” as well as the fantastic “Hernando’s Hideaway” number from “The Pajama Game”: