Yahoo works to delay Microsoft proxy battle

Yahoo is extending the deadline for nominations to its board of directors, Reuters reports. While nominations were to have ended by March 14th, they will now take place 10 days after the company announces a date for its shareholders' meeting. The move is openly admitted by CEO Jerry Yang to be a delay tactic, preventing Microsoft from subverting Yahoo in order to ease its hostile takeover attempt. "Microsoft, of course, could still choose to name directors," says Yang in a letter filed with the Securities and Exchange Commission, "but our objective here is to enable our board to continue to explore all of its strategic alternatives for maximizing value for stockholders without the distraction of a proxy contest."

Citing anonymous sources, the Wall Street Journal claims that Yahoo is stepping up efforts at a deal with AOL, which would effectively block a Microsoft acquisition entirely. Talks have allegedly become more intense than ever, and now involve a theoretical folding of AOL into Yahoo, giving the former's parent company -- Time Warner -- a minority stake in the merged entity. Together, each side could save as much as $1 billion per year.

Yahoo is also said to be continuing discussions with News Corp., from which it might gain sites like MySpace in exchange for a stake. Despite the presence of a basic deal on the table, however, it is believed that a Microsoft purchase is more likely than this alternative.

Filed under: industry
Other story tags: Microsoft, Yahoo, AOL, Time Warner, News Corp., SEC