Proxy Time, Part II

4:50 PM -- All had been quiet on the Microsoft Corp. (Nasdaq: MSFT) and Yahoo Inc. (Nasdaq: YHOO) soap opera in recent weeks, but the plot thickened yet again today as Yahoo continues to scramble to fight off Microsoft's hostile takeover bid.

First came the news early this morning that Yahoo was talking to Time Warner Inc. (NYSE: TWX) about a possible partnership. (See Yahoo Turns to Time Warner.) That alone was a big sign that Yahoo was doing everything it could to buy itself time to defend itself from Microsoft. But then, the company confirmed later today that it was extending its March 14 deadline for nominating new directors to its board. (See Proxy Time.)

The new deadline will be 10 days after whenever Yahoo gets around to announcing the date of its shareholder meeting. This effectively delays Microsoft launching a proxy fight where it would try to force new members onto the Yahoo board of directors that would vote in favor of its proposed takeover bid.

This seems to be another sign pointing to a deal eventually getting done. Yahoo's stock inched up $0.61 (2.19 percent) to $28.67 today with much of the gains coming late in the day. Yahoo clearly is feeling the pressure to accept the Microsoft offer and it is reacting with the composure of a Yorkshire terrier during an earthquake. Should be fun to see how this plays out.

— Raymond McConville, Reporter, Light Reading

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