05/07/2008 05:12 am ET Updated May 25, 2011

Why Steve Ballmer And Microsoft Will Keep Chasing Yahoo

Why is Microsoft taking it sweet time showing its next move in the battle for Yahoo? I suspect it is simply arranging the forces for its next attack.

Why? Because I don't think Microsoft Chief Executive Steve Ballmer could accept giving up--that would mean Microsoft conceding that it simply could not be a leader in the leading form of consumer technology, Internet-based services.

There is a good argument, of course, for Microsoft to drop its bid for Yahoo. Indeed, Jerry Yang and Sue Decker, the top executives of Yahoo, have only found one plausible, if imperfect, takeover defense: their vehement opposition to a deal, which might increase Mr. Ballmer's fear that it will be harder than he thought to keep the talent and business momentum at Yahoo after he buys it.

Mr. Ballmer said last week that Microsoft might walk away from its offer to buy Yahoo. There are reports of rather significant opposition from within Microsoft's rank and file to the deal. Executives worry that it would be an expensive distraction when Windows, Office and Xbox all need money and attention.

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