Microsoft Yahoo Deal Gonna Happen

Reports from redOrbit are that Microsoft is under pressure NOT to sweeten the offer for Yahoo, for fears it will hurt Microsoft financial performance through 2011. Large investors who hold both Microsoft and Yahoo shares are most concerned, and there's some evidence this could happen by looking back at Oracle's stock drop after devouring a plate full of PeopleSoft.

Speculation is that Microsoft next move is to start politicking big Yahoo shareholders to put pressure on Yahoo's board to take the $31 per share offer.

As I've said previously, I still don't see the efforts by Yahoo to swing a deal with News Corp. bearing any fruit. And the number of white knights who could pull together this counter offer to Microsoft's bid are far and few between. Yahoo's weak attempts at poison pills (golden parachute deals for employees) could be a sign that the board is only willing to go so far to avoid a takeover by Microsoft.

This deal is starting to parallel the presidential primary race, with nightly analysis of whether one side has enough to pull ahead and take the lead, or if we've still got a horse race. Microhoo isn't a done deal by any stretch but I think there's still a very good chance of this deal happening.

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