Wall Street Journal reporters Matthew Karnitschnig and Robert A. Guth today report that Microsoft is still in pursuit of Yahoo — Yahoo's search business, anyway — and is trying to team up with another media company, perhaps Times Warner or News Corp., to do a deal. Any day now we expect Microsoft to approach Crosscut, so anxious seem the Redmondians to get a piece of Yahoo. But today's WSJ story is much more than a few paragraphs about another twist in CEO Steve Ballmer's obsession. It's the backstory, an exclusive account, something which the paper typically prints the day a deal is announced. Maybe the editors got tired of waiting for closure. Aw, screw it, let's just run it now.
The Journal sometimes makes articles available to the unwashed masses, but this one is behind the subscription firewall. If you have a sub, here it is. [Update: There's a free link now.]
The third paragraph begins with a sentence that tells the reader to read no further: "Some of the people familiar with these talks say they are preliminary and unlikely to result in a deal with Yahoo." But that's actually where the story gets interesting. For whatever reason, the Journal decided to drop in the entire backstory of the Microhoo love-hate relationship under a few grafs about an incremental development, and it's a fascinating read. It lays out the dance between Ballmer and Yahoo CEO Jerry Yang and other executives as negotiations grew cordial, as Yahoo lowered its asking price (not that Yahoo was asking to be bought, mind you), and as Ballmer surprised Yahoo by walking away.
It talks of a meeting in neutral city ...
On April 15, the two sides met in Oregon at the Portland offices of Kirkpatrick & Lockhart Preston Gates Ellis LLP, the former law firm of Microsoft founder Bill Gates's father. With both companies concerned about leaks, Microsoft took pains to ensure that the meeting remained a secret. It instructed Mr. Yang and his coterie of advisers to drive to the back of the building, where a woman holding a closed red umbrella would be waiting for them at the loading dock.
... and of a secret meeting at "the airport" in Seattle (Boeing Field?) ...
The two sides met at the airport, in a conference room overlooking the runway. The Yahoo camp was encouraged that Mr. Ballmer had donned a polo shirt in purple, Yahoo's color. For several hours, the men discussed Microsoft's proposal to acquire Yahoo's search assets.
During a break, Mr. Ballmer boarded Mr. Yang's plane and the two discussed the deal in private. Others sitting at the rear of the plane could hear the two men laughing.
... and of a secret meeting on a Montana golf course ...
A week later, Messrs Ballmer and Yang met for a round of golf with mutual friends at Stock Farm, an exclusive club in southwestern Montana's Bitterroot Valley. The atmosphere was friendly but the encounter didn't result in a breakthrough.
"They believed that we needed them much more than they needed us," one person close to Microsoft says. "Ultimately, we called their bluff."
If that's the case, people close to Yahoo say, they wonder why Microsoft continues to knock on their door.
So who told the reporters all this stuff? Lots of people. "People familiar with the discussions," "people involved in the talks," "people familiar with these talks," "a person familiar with the matter," "people in Yahoo's camp," "people close to the company," "people familiar with the matter," "people familiar with the meeting," "one person involved in the negotiations," "people familiar with his thinking," "a person who was present," "those present," and, as you can see, "one person close to Microsoft" and "people close to Yahoo."
