Microhoo: what's going on?
30-04-2008
by The Register

Microsoft is laying aside USD1.5 billion to keep Yahoo staff happy and at their desks should the takeover go through.

The cash was revealed in court documents from last month. The figure comes from a transcript of a hearing held on 24 March (available here). But lawyers noted that the figure for staff retention could also include the cost of lay-offs.

The class action case is being brought against Yahoo by two Detroit public pension funds. It calls on Yahoo's board to accept Microsoft's offer.

Microsoft has gone out of its way to reassure Yahoo staff that a takeover would not mean substantial job cuts.

In February, it published an e-mail which said: "People are the single most important asset in this combination... There's no question we will dedicate significant rewards and compensation to Yahoo and Microsoft employees."

Although the e-mail ceded there may be some overlap, it said Microsoft had hired 20,000 people since 2005. Johnson also said Microsoft would keep Yahoo's Silicon Valley campus which is home to 10,000 Yahoo employees.

The deadline for Yahoo to accept Microsoft's offer passed at the weekend, but there has been no word from either side since. Steve Ballmer was threatening to launch a proxy battle -- to ask shareholders to approve his own nominees for the board who would then vote in favour of the takeover. Some blogs are predicting an announcement could come later on Wednesday.

Yahoo has not announced when its annual shareholder meeting will be held. Last month Yahoo CEO Jerry Yang said it was extending the deadline for naming board appointees to 10 days after it announces the date of the meeting. This stopped Microsoft naming its nominees.

It continues to insist the offer substantially undervalues the firm and is looking for alternatives.

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