As many of you have read or heard, Yahoo's board of director's are declining Microsoft's 44.6 billion dollar bid for the company.

It isn't a matter of being bought out by Microsoft, but of money. The Wall Street Journal is reporting that Yahoo is countering the $31 share offer with a $40 counteroffer.

I imagine that Microsoft will take the counteroffer in due time. Of course this would raise the buyout price by $12 billion dollars.

"Yahoo's board believes that Microsoft's is trying to take advantage of the recent weakness in the company's share price to "steal" the company. The decision to reject the offer signals that Yahoo's board is digging in its heels for what could be a long takeover battle. The company is unlikely to consider any offer below $40 per share, the person said." - WSJ

Microsoft wants more market share in search, social networking and advertising, thus making Yahoo a prime target.

I think this will happen despite Google's interference in the buyout talks. Google has already tried throwing a couple of monkey wrenches into the deal.

"Google raised the specter of Microsoft using its proposed acquisition of Yahoo! to gain illegal control over the Internet, underscoring the online search leader's queasiness about its two biggest rivals teaming up, The Associated Press reported.

The critical remarks, posted online Sunday by Google's top lawyer, represented the Mountain View-based company's first public reaction to Microsoft's unsolicited bid for Yahoo! since the offer was announced, AP reported." - CNN

Of course Google is worried about such a deal. With the purchase of Yahoo, Microsoft will have a near instant gain in several areas that would compete directly with Google.

I would love to hear your comments on this!

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