Report: Yahoo executives to turn down Microsoft takeover

An insider purportedly familiar with the situation hints that Yahoo's board of directors sees the proposed Microsoft takeover as exploiting a momentarily vulnerability in Yahoo's stock price, hoping to land a relative bargain.

Executives at the search engine company aren't likely to even consider offers below $40 per share — or about $12 billion more than what's been offered so far, according to the report.

The alleged source in turn states that Yahoo is determined to choose any other option that would allow the company a greater amount of freedom. Although this and most reports suggest that a deal with Google to license ad or search technology is the most likely solution, others have suggested candidates as diverse as Apple or InterActiveCorp, all of whom may have a vested interest in denying Microsoft control of Yahoo.

No matter which firm (if any) accepts the bid, the primary goal is to take a "poison pill" strategy to Microsoft's unsolicited bid, the paper says. By forcing Microsoft to either raise its bid or go through other means to force a deal, Yahoo's refusal will make any bid seem overly aggressive and trigger dissent among the core engineering staff — and therefore robbing Microsoft of the very employees it wants.

Neither Microsoft nor Yahoo has commented on the apparent decision, which may also face stiff opposition from regulators if the search firm points to the takeover as evidence of monopolistic behavior.