Microsoft alters strategy in Yahoo takeover

Yahoo is playing hard-to-get, but Microsoft isn't bothered

The much-speculated Microsoft-Yahoo acquisition has taken yet another twist.

Sources close to the situation say that Yahoo is keeping Microsoft onside, and could be looking for a higher asking price after all. That’s despite continuing to resist Microsoft’s hostile proposed acquisition through a proxy fight this week by amending its by-laws.

Yahoo buying time

But Microsoft's board of directors is ready to act. Realising that Yahoo is trying to buy time in an attempt to find possible alternative suitors, Microsoft has reportedly tapped a number of viable candidates for the Yahoo board.

It will present them at the company's annual election later this year. Some have also speculated that Microsoft's board may make its candidates' names public this week to pressure Yahoo into private discussions.

Many have wondered how long Microsoft will be prepared to pursue the online firm before giving up. Jerry Yang and company have played hard-to-get, doing everything possible to coax other companies into merging with it instead. But Microsoft is moving ever closer and, according to reports, will outline its future plans this week.

"Microsoft's management will choose how to respond to this in the next few days and update the board on how to proceed," said a source, who also noted that Yahoo has yet to formally respond to the buyout offer.

Neither Microsoft nor Yahoo have commented on the developments, but look for this story to become even more convoluted as it develops.