*UPDATE: An hour later, Microsoft corporate is frantically backtracking:
“Our position hasn’t changed. Microsoft has no interest in acquiring Yahoo; there are no discussions between the companies.”
When we followed up on this, a Microsoft source explained that Steve made the “deal still makes sense” remark while deep in a discussion with Gartner Group analysts (“Response to a question opened up some questions.”) Our take, therefore, is that Steve Ballmer just inadvertently revealed HIS OWN attitude toward a Yahoo deal, not Microsoft’s official one. But given that Steve is Microsoft’s CEO, it’s his own attitude that matters.
EARLIER: As soon as Steve Ballmer said a Microsoft-Yahoo “deal might make sense,” reporters rushed to the phones and called their sources. Then they breathlessly reported that the market’s immediate move to bid up Yahoo (YHOO) was wrong. Why? Because “there are no new Microsoft-Yahoo negotiations.”
Steve Ballmer just reopened negotiations. He also even made a vague bid for Yahoo. So it’s no wonder that the stock has jumped.
Remember when we last left this story? Yahoo was trying everything it could to resurrect a deal that it had blown through its own intransigence. Yahoo went so far as to say that it would be happy to do a deal at Microsoft’s last bid, $33. And the strong impression we got was that a chastised and sobered Yahoo would be happy to do a deal below that.
And that was when Yahoo’s stock was in the $20s. Yesterday, it settled around $11.50.
For the past several months, Microsoft has steadfastly refused to reopen any sort of Yahoo discussions. Microsoft, the party line went, had “moved on.” Well, now, all that has changed.
What Steve Ballmer just said was:
We’d be glad to buy Yahoo. Of course we’re not paying what we would have paid before because Yahoo’s stock has collapsed. We also imagine that Yahoo’s management is still hallucinating about the value of the company, in which case we have nothing to talk about. In the event that they have come to their senses, however, they should give us a call.
What price does Steve have in mind? $20 would probably do it. We also imagine that Gordy Crawford, Carl Icahn, and many other major shareholders are now demanding to speak with Jerry Yang and Roy Bostock and ordering them to resume negotiations.
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