Microsoft won't budge on Yahoo price
Microsoft is unlikely to raise its $31 a share offer for Yahoo and is girding for a protracted battle. The Wall Street Journal reports that Microsoft isn't going to bid against itself. The bet: A slowing economy will ding Yahoo and ultimately make Microsoft's bid look generous.
It's not a bad bet. Microsoft's move means that Yahoo has to prove its projections are accurate and that means the portal needs to deliver multiple quarters of strong execution in a slowing economy. If Yahoo stumbles it will be under intense pressure to take Microsoft's offer.
Meanwhile, there will also be more pressure on Yahoo over a looming threat from Chinese regulators who may exclude Alibaba from any Microsoft purchase. Toss in the fact that Yahoo hasn't found any credible white knights and it's not surprising that Microsoft won't raise its offer right now.
If the ball bounces Microsoft's way Yahoo may be fortunate if the software giant doesn't cut its price.