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May 02, 2008
Look out, Ballmer's getting angry

After three months of a messy public courtship, relations at Microhoo are expected to sour. According to a story in The Wall Street Journal, Microsoft is expected to launch a hostile takeover bid for Yahoo later today.

So what does a hostile takeover bid mean? For the foreseeable future it means more of the same as Microsoft boss Steve Ballmer and Yahoo chief Jerry Yang will effectivly formalize their dispute over price. But that time lag -- such a fight could take months -- is likely to weaken Microsoft's larger aim of competing with Google because Yahoo employees are expected to look for work elsewhere. Add to the possibility of a brain drain at Yahoo the certainty that Microsoft will be distracted at a time when it desperately needs to forge relationships in the advertising world, and it's easy to see why Ballmer had hoped to avoid a hostile takeover.

That dire picture prompted Ballmer to tell The Wall Street Journal that Microsoft could go it alone if need be. But he added that help in the form of Yahoo would certainly speed up the company's transition to advertising.

As for a timeline on the hostile takeover bid, Microsoft will need to seize control of Yahoo's board. According to Yahoo's bylaws, directors are elected only at the company's annual shareholder meeting. Yahoo hasn't set a date, but the company is thought to be looking for a July meeting.