• San Jose Mercury News, Wednesday, February 13, 2008 11 AM

Yahoo "seems to be coming apart at the seems" said Bruce Brown, managing partner of recruiting firm Daversa Partners, amid the turmoil created by Microsoft's $45 billion bid for the Internet giant. The headhunters are circling. Said David Mather, an executive recruiter specializing in technology: "There continues to be a supply problem of really high-quality people."

Not only did Yahoo this week begin handing out pink slips to 1,000 of its 14,000-plus employees, but the firm rejected Microsoft's offer to acquire the company for $31 per share, leaving shareholders in both companies concerned. In a note to investors, Legg Mason portfolio manager Bill Miller, whose company owns 6 percent of Yahoo, recommended that Yahoo accept Microsoft's offer, although he admitted the company's board was unlikely to do so unless Microsoft raised its bid.

He added: "We think it will be hard for Yahoo to come up with alternatives that deliver more value than Microsoft will ultimately be willing to pay."

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