Microsoft's next move?

Three weeks ago, Microsoft gave Yahoo an ultimatum: Agree to a deal or face a hostile takeover. Well, the deadline has passed, and Yahoo has not entered into talks, notes MarketWatch. You could say it has called the bluff. So the next move is Microsoft's. According to news reports, the bankers are busy behind the scenes, but have produced no breakthrough. So you get the feeling that a higher bid would lead to a deal. We'll have to see how this plays out. A hostile offer would be really tricky if it alienates employees, whom Microsoft would like to keep. Barron's notes Citigroup's Mark Mahaney's view that there's a 45 percent chance a deal is struck at higher price; a 40 percent chance the deal goes hostile; a 10 percent chance Mr. Softie quits; and a 5 percent chance the companies agree to a deal at the current offer.  

For more:
- here's a MarketWatch article
- here's the Barron's item

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