Yahoo running out of options

It looks as if Yahoo will be dragged down the aisle by its suitor, Microsoft, no matter how loudly Google speaks its piece. On Monday, other potential mates with deep pockets denied they would try to beat Microsoft Corp.’s $44.6-billion offer even as investment bankers tried to help Yahoo remain unhitched.

But Yahoo Inc.’s board of directors can’t simply say no to such a strong offer without providing a better alternative, analysts said, and few options have emerged that wouldn’t outrage shareholders or antitrust regulators. The company that Microsoft and Yahoo fear most in the Internet business — Google Inc. — is trying to quash the deal by also courting Yahoo.

On Friday, the day Microsoft Corp. made its bid public, Google Chief Executive Eric Schmidt called Yahoo CEO Jerry Yang to offer help in fending off the Redmond, Wash.-based software giant, according to a person familiar with the discussion. The companies, which are both based in Silicon Valley, have discussed having Google run Yahoo’s search-engine business.

Some analysts said the Microsoft bid was low because even though Yahoo stock was trading in the teens last week, it had hit the mid-$30s as recently as October. They also pointed to Yahoo’s stakes in Yahoo Japan Corp. and China’s Alibaba Group Holding, which have a total market value of more than $12 a share.

Source: LA Times.