Commentary

Just An Online Minute... Board Members Split On MicroHoo

Yahoo's Jerry Yang appears to be facing even more of an uphill battle to fend off Microsoft than originally thought.

Some of the company's board members, including Chairman Roy Bostock, are among those who are pressing for a merger, according to the New York Post. Reportedly, the pro-MicroHoo faction believes that Yang is rebuffing Microsoft more for emotional reasons than sound business strategy.

The company's official story is that it rejected Microsoft's $31 per share offer because it "substantially undervalues" the company -- even though the offer was for 62% more than Yahoo was then trading at.

"We have a huge market opportunity -- and are uniquely positioned to capitalize on it. The global online advertising market is projected to grow from $45 billion in 2007 to $75 billion in 2010. And we are moving quickly to take advantage of what we see as a unique window of time in the growth -- and evolution -- of this market to build market share and to create value for stockholders," the company said in a letter to shareholders this week.

But some say it's personal for Yang; he doesn't want to see Redmond swallow the company he co-founded in 1995. In fact, his distaste for that prospect is so strong that Yahoo is now considering deals that seemed unlikely only a few weeks ago, including tie-ups with AOL, News Corp. and Google.

Still, some board members are apparently ratcheting up the pressure to sell, and avoid the avalanche of shareholder lawsuits that will follow if Yahoo permanently rebuffs Microsoft and its stock then plummets. In fact, Yahoo's rejection of the $31 a share bid has already sparked one lawsuit, filed earlier this week by the retirement fund Wayne County Employee's Retirement System of Michigan.

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