No news emerged over the weekend from the respective Yahoo and Microsoft camps regarding the deadline set by Steve Ballmer for Yahoo to begin negotiating in earnest with Microsoft.

Facing a talk or else Saturday deadline, it looks like Yahoo opted for 'else', setting the challenge for Microsoft to spend heavily on escalating its hostile takeover of the portal. Microsoft wants Yahoo's second-place search traffic added to its third-place properties of MSN Search and Live Search to capitalize on paid search advertising.

Microsoft did complete a search-related deal before heading out for the weekend. They finalized the acquisition of Fast Search & Transfer. That firm's CEO, John Markus Lervik, becomes Microsoft’s corporate vice president of enterprise search, Microsoft said in a statement.

We've thought the Fast deal presented a lot more to Microsoft than just search. Fast has technology in a variety of areas, including surveillance and enforcement. We speclated in January on this.

But on the topic of Yahoo and Microsoft, the public relations offices remained quiet over the weekend. No statements, no posturing, nary a peep. Microsoft could be ready to walk away from the deal, an action that wouldn't harm them greatly but poses a threat to Yahoo's stock, which climbed in value with the initial announcement of Microsoft's bid.

Walking away from the deal seems unlikely for Microsoft. According to an analyst cited by Bloomberg.com, Microsoft needs Yahoo. "If they didn't, they would have walked away a long time ago," said analyst Sachin Shah.

Meanwhile, the rest of the Internet industry is in hurry-up-and-wait mode for something new to happen with the deal. The easiest course seems to be for Microsoft to raise its bid enough for Yahoo to save face with investors while accepting the offer. Yahoo never ruled out being acquired, only protesting the price.

Microsoft isn't competing with anyone else for Yahoo. A brief trial of Google's advertising in Yahoo's search results already has antitrust regulators in Washington stirring from their repose. News Corp more likely represents a Microsoft ally, based on Rupert Murdoch's public comments.

If a white knight bidder for Yahoo exists, it hasn't emerged yet and looks unlikely to do so. Likewise, Microsoft may still see no reason to give Yahoo more money, with no competing bids out there. The groundwork looks set for a hostile takeover to ensue.

Source: www.webpronews.com