Well, it took a little longer than expected, but it appears that Microsoft is finally stepping up to the plate with an offer that provides a 62 percent premium over the Thursday, $19.18 closing price of Yahoo.
While indicating that the two companies have had previous conversations, Microsoft CEO, Steve Ballmer wrote that “Microsoft’s consistent belief has been that the combination of Microsoft and Yahoo! clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers”.

“In late 2006 and early 2007, we jointly explored a broad range of ways in which our two companies might work together. These discussions were based on a vision that the online businesses of Microsoft and Yahoo! should be aligned in some way to create a more effective competitor in the online marketplace. We discussed a number of alternatives ranging from commercial partnerships to a merger proposal, which you rejected.”

“While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo! that we are proposing.”

Yahoo, who, over the past few years, has had difficulties in maintaining its market share against search/advertising rival Google, while at the same time Microsoft, after spending considerable time and money on its own search engine Live without the success they had hoped for.

I said back in May of last year, that a Microsoft / Yahoo combination would be beneficial to both companies.

As an interesting side note - Terry Semel, former CEO and member of the Yahoo Board of Directors, tendered his resignation from the Board on Thursday. Jerry Yang, Yahoo co-founder replaced Mr Semel, who had been the Yahoo CEO

Stay tuned