Life of Guangzhou - Microsoft: Yahoo Bid to Stay

MICROSOFT Corp Chief Executive Officer Steven Ballmer said the world's biggest software maker doesn't plan to raise its US$44.6 billion offer for Yahoo! Inc

"We are offering a lot of money," Ballmer said yesterday at a Microsoft conference in Milan. "If Yahoo's shareholders like it, that's great. We are prepared to go forward without a merger with Yahoo." Microsoft has offered US$31 a share in cash and stock.

In an effort to catch up with Google Inc in online search and advertising, Microsoft made an unsolicited offer for Yahoo in January. Yahoo's board rejected the bid as too low, said Bloomberg News.

Microsoft has said it will take the bid directly to Yahoo's shareholders.

Yahoo, owner of the second most popular search engine, yesterday reported its first quarterly profit increase in more than two years and gave a forecast for this period that met analysts' estimates.

The shares dropped in extended trading on investor disappointment that the growth was not stronger.

Sales climbed 14 percent last quarter, while Google posted growth of 46 percent.

Yahoo has four days left to consider Microsoft's offer. Ballmer has threatened to nominate an alternate slate of board members and possibly lower the bid if Yahoo fails to agree to terms by April 26.

"Time is money, we've made that clear," Ballmer said of the deadline yesterday in a news conference following his speech at the conference.

Microsoft may still decide to raise its bid, Larry Haverty, who helps manage US$31 billion at Gamco Investors Inc in New York, said in comments before Ballmer's speech yesterday.

The company may offer as much as US$34 a share to avoid losing too many Yahoo employees, said Haverty, whose firm owns both Yahoo and Microsoft shares.

When asked if Microsoft might be interested in buying Google, Ballmer said the company would not make an offer because it was too expensive and there would be regulatory and antitrust concerns.

Microsoft fell 17 cents, or 0.6 percent, to US$30.25 in Nasdaq Stock Market trading on Tuesday.

The shares have dropped 15 percent this year.

Yahoo declined 1 cent to US$28.54 yesterday and the stock has risen 23 percent this year.

Shares of the Mountain View, California-based Google climbed US$17.21 to US$555 yesterday. The shares have fallen 20 percent this year.

Price cuts on Microsoft's Xbox 360 video-game system in Europe have helped sales, Ballmer said.

"The price cuts on Xbox have been very helpful in lifting volume," he said. "We've seen a real surge."

(By Sara Gay Forden)

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