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What more could Yahoo want?

Outside the Yahoo campus in Sunnyvale, California

TEXT OF INTERVIEW

KAI RYSSDAL: The official Yahoo press release this morning put it pretty starkly in dollars and cents terms. It said the $31 a share Microsoft offered a week ago Friday, undervalues what the board feels the company's worth, so maybe they're just angling for more money. The email from Chief Yahoo Jerry Yang to his employees today struck a different note. He said the company's continuously evaluating its options, so maybe they're talking to somebody else. Whichever of those you believe to be true, this deal's nowhere near dead yet. Andrew Ross Sorkin's been covering the story for the New York Times. Good to talk to you.

ANDREW ROSS SORKIN: Thanks for having me.

RYSSDAL: So the first reaction, really, to the formal rejection has to be, come on, are you serious that you think it's undervalued, or are you just really against the deal?

SORKIN: I think it's almost impossible to think that they are doing anything more than a grand negotiation with Microsoft. I've said it before, I think it's almost Murdochian, in the way that Rupert Murdoch went after Dow Jones, in that the board is going to have to eventually capitulate and say yes. It's just a matter of at what price.

RYSSDAL: Alright, but wait a minute. Murdoch offered 60, and eventually closed the deal at 60 for the Journal.

SORKIN: That's exactly right, and it may very well be that Microsoft actually doesn't even have to up its bid. Having said that, I suspect, just because of the way Microsoft is, it's very possible that they bump it a couple bucks just to clinch the deal and get it over with.

RYSSDAL: Do you think this will ever get to the point that Steve Balmer and Microsoft have threatened, which is to say going out to the big shareholders and saying, listen, you need us, you don't need them?

SORKIN: I think that's already started, and frankly if that doesn't work, unto itself, I think it's going to get more hostile and more nasty, and you're going to see a couple things take place. I think first you're going to see a proxy fight for control of the board. I think you're going to see Microsoft nominate a slate of directors and seek to oust the board of Yahoo, and at the same time they might also seek to do what's called a "tender offer," which is where they actually go directly to shareholders and say give me your shares, I'll give you $31 for each share you bring me.

RYSSDAL: I want to ask you about somebody you wrote about in the paper today, this new CFO at Microsoft, Christopher Liddell is his name. His quote to you was you have to be "daring and ruthless," I think he said.

SORKIN: I think that he said you have to be "disciplined and ruthless."

RYSSDAL: Disciplined, sorry, close, but the point is almost the same.

SORKIN: The point is the same, and I think, you know, that's the other thing that's going on that's so interesting at Microsoft. They are really getting a lot more aggressive. They have never made a hostile bid ever in their history, and they've never made a bid of this magnitude in their history as well, and so I think you're seeing a different face of Microsoft, in part because, you know, Bill Gates is in the twilight of his career at Microsoft. He's going to go off and run the Bill and Melinda Gates Foundation, and Steve Balmer, a very aggressive guy, is now the CEO of that company, and I think you're going to see more transactions, and a different culture and a different style, at least toward shareholders and the finance world, going forward

RYSSDAL: Back to Yahoo for one second. At the end of the day, is there anyway that they squeak out of this with some kind of deal with AOL or whoever it is, or in six, eight weeks is it Microhoo or Yahsoft or something?

SORKIN: I think it's probably the latter. It's really tough to see what type of deal they could do. You know a deal with AOL doesn't really help their cause and any type of deal that they could try to strike with Google, as much as they wish they could, is sure to get held up on antitrust grounds, so at the end of the day, the Microhoo or the Yahoosoft, or whatever you want to call it, I think may be the new name.

RYSSDAL: Andrew Ross Sorkin writes for the New York Times. He also edits their blog. It's called DealBook. Andrew, thanks a lot for your time.

SORKIN: Thanks so much.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.

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