Microhoo! what's! going! on?

Possible announcement likely maybe today

By John Oates • Get more from this author

Posted in Financial News, 30th April 2008 11:14 GMT

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Microsoft is laying aside $1.5bn 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 costs 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 email 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 email 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. 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 today.

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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