Microsoft's next move in bid for Yahoo could come as early as today (WSJ)

By Nancy Tartaglione-Vialatte

Today�s Wall Street Journal says Microsoft is expected to make its next move in the three-month-old takeover standoff with Yahoo as early as today. Up to now, the two sides have failed to reach any negotiated acquisition deal.

One option Microsoft has weighed is nominating a proxy slate of directors to replace Yahoo's board, while waiting to put any acquisition offer directly to Yahoo shareholders, people familiar with the matter told the WSJ.

Such a move could effectively delay Microsoft's fixing any firm new price on its offer for Yahoo, allowing it to pull back from the $42 billion bid it initially made, while keeping the option of later going directly to Yahoo shareholders with a hostile acquisition offer.

Microsoft has said it would announce its next move in its pursuit of Yahoo this week, and the two sides haven't had any formal negotiations since a deadline Microsoft set for going hostile passed Saturday, sources told the Journal.

A central issue dividing them has been price, with Yahoo saying that Microsoft's offer, valued at $29.12 a share as of Tuesday's market close, "substantially undervalues" it. Some major Yahoo shareholders have signaled they want closer to $35 a share. Further, some have suggested they wouldn't back Microsoft in a hostile acquisition effort unless it raised the offer above its $31 a share value when initially extended in January.

But even if Microsoft didn't right away sweeten its offer or take it directly to shareholders as threatened, it could still set in motion the steps required to nominate a new group of directors for Yahoo. Sources told the Journal that Microsoft has selected 10 nominees and three alternates to nominate to Yahoo's board.