It’s almost official… Yahoo! is going to say no to the proposed MS buy-out…

With all the hubbub wrapped around the unsolicited buy-out bid that Microsoft made a few days ago, I know a lot of people have been patiently watching and waiting to see what Yahoo! would say. It seems as though their answer is going to come in the next day or so; and for Microsoft, it isn’t going to be what they wanted to hear…

According to a source cited by the WSJ, "a person familiar with the situation" leaked information that the Yahoo Board has determined that the price that Microsoft is offering ($31/share) grossly undervalues the company. The bid also fails to consider the business risks that Yahoo would be taking with Federal Regulators if they said, "yes" and entered into the agreement.

According to a story reported by ComputerWorld, Yahoo would be unlikely to consider any offers below $40/share. If that’s the case, Microsoft is going to have to come up with an additional $13B. That would require Microsoft to come up with $57.6B to compete with Google.

I had been considering most of these questions myself over the past couple of days. The biggest questions in my mind are the regulatory related ones. While I’m not entirely certain that there’s any conflict of interest here (the only reason why MSN’s search engine functionality is a minor consideration is because of the cash that MS has. Without it, MSN is less than a minor player, in my humble opinion). Would a Yahoo!-Microsoft marriage be a bad thing?  Would it cause problems for the search engine world, or would it really just cement Google’s dominance in the market as the two giants struggled to merge into one search engine contender?

I’d love to hear what you have to say.  Why not join in the discussion and let us know what you think?