Gates says Microsoft won't raise Yahoo bid

Whether Microsoft intends to take its case to Yahoo shareholders, and maybe raise its offer in so doing, remains well within the company's rights. Nonetheless, Bill Gates said, at the very least, that a price hike wasn't necessary.

A multitude of press sources presented conflicting reports on Microsoft Chairman Bill Gates' comments following a speech at Stanford University yesterday. What Gates apparently said was that Microsoft has no plans to raise its $31 per share cash/stock bid for Yahoo, and that's the part that Reuters, the Associated Press, and The New York Times agreed upon.

What they disagree upon is what he actually meant -- specifically, whether "no" means "yes." The confusion led MarketWatch this morning to simply report the conflicting stories as they appeared to stand, with the Times backing the AP's account that Microsoft could raise its bid through a proxy campaign with Yahoo's shareholders, and Reuters sticking with Gates' literal meaning.

"We've sent our letter and we've reinforced that we consider that it's a very fair offer," states Reuters' quote of Gates. Other press sources this morning provided similar, though not exact, phraseology.

Perhaps more importantly, though, Reuters quoted Gates as having told reporters that in the end, Microsoft doesn't really need Yahoo to succeed. "We can afford to make big investments in the engineering and marketing that needs to get done," states the Reuters quote. "We will do that with or without Yahoo."

The relative reliability of technology-related news from major press sources has come under question in recent days, especially after multiple sources reported on Saturday that Toshiba had actually announced that day its intention to back down on HD DVD production -- an announcement the company actually made this morning.

The news, such as it was, triggered a selloff in Yahoo shares this morning on the NASDAQ stock exchange, falling 2% in share value by 11:00 am EST to about $29. Last Thursday at mid-day, Yahoo share value peaked at about $30.25 -- very close to the point where Microsoft would probably have had to raise its bid anyway.

So Gates' comments may have had the desired effect: tapering off the public value of Yahoo somewhat below the price Microsoft is willing to pay.