Yahoo Board Split Over Microsoft Bid

Despite a sharp rebuttal, it seems shareholder pressure is mounting on the Yahoo board to accept a bid from Microsoft.

According to a source cited in the New York Post, an independent group of Yahoo! board members including chairmen Roy Bostock and billionaire Ron Burke is putting pressure on chief and co-creator Jerry Yang to broker a deal to sell.

"The emotional part of Yang would rather do anything but sell to Microsoft," says the source, "but he doesn't have the cards to come up with a value-creating, competitive alternative for shareholders."

The heart of the issue is that Yang believes his creation can rise from its current doldrums and once again become a market leading force - a turnaround which would certainly see the search giant's value skyrocket beyond the 65 per cent premium Microsoft has placed on the company which sees it valued at $44.6bn. Yang shares this belief with fellow board members Eric Hippeau, of Softbank and Robert Kotick, CEO of Activision.

"They're just as emotional as Jerry and as biased against selling to Microsoft as he is," said a second source also quoted by the NYP.

As usual, the reality in all this is likely to be found in the middle ground. Yahoo is having a tough time of it at present, but with a redesigned email offering, homepage and (vitally) momentum in the mobile phone market - it has partnerships with Nokia, Samsung, Motorola and LG while T-Mobile has recently dropped Google in favour of it - there is light at the end of the tunnel.

So the argument is essentially: take the money and run or keep the faith. The problem: the 21st century is a period seriously obsessed with the former and distinctly lacking in the latter...