Filed under: Deals, Microsoft (MSFT), Yahoo! (YHOO), Marketing and advertising

Microsoft Corp. (NASDAQ: MSFT) will start a proxy fight for Yahoo! Inc. (NASDAQ: YHOO) “unless Yahoo reverses course and enters into talks’ regarding its $44.6 billion unsolicited offer,” according to The New York Times‘ DealBook blog. I’ll believe it when I see it.

First of all, proxy battles are a gigantic pain in the butt. The more massive the deal, the bigger the hassles. There are lawyers, proxy solicitation firms and deal PR firms to pay. M&A reporters at the major media outlets have to be wooed. It takes forever.

Yahoo’s board probably won’t meet until June. Plenty of things can happen between now and then. Probably, the only reason why Microsoft is even considering a proxy fight is because Yahoo does not have a staggered board, meaning all of its directors are up for renomination this year.

Investors need to remember that the media cares about to hype potential battles like proxy battles even if the chances of them actually happen are quite remote.

Freelance writer Jonathan Berr edits the blog Ketchup and Eggs.

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Filed under: Business, World wide web, News, Microsoft, Yahoo!

Microsoft is apparently taking the next steps in its bid to buy Yahoo! A few weeks ago the Yahoo! board of directors rejected Microsoft’s $31 per share bid, saying that it undervalued Yahoo! at $44.6 billion. The general consensus was that Yahoo! would be plenty happy to be taken over by Microsoft — for a higher price. But Microsoft instead has taken a different approach: Try to replace Yahoo!’s board of directors.

Microsoft is expected to spend between $20 and $30 million to nominate a new board of directors and try to convince Yahoo! shareholders to elect the group. While that might seem like a lot of money, it’s a lot cheaper than raising the bid price.

On the other hand, with both Microsoft and Yahoo! stock falling, the original bid’s value has already dropped a few billion. Maybe Microsoft just needs to wait until Yahoo! stock hits bargain basement prices before making another offer.

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Filed under: Deals, Competitive strategy, Employees, Delta Air Lines (DAL)

The conventional wisdom is that labor unions in the US are close to dead and no longer have much influence on the managements of large companies. Tell that story to the boards at Northwest (NYSE: NWA) and Delta (NYSE: DAL). Disagreement at the pilot’s union might undermine a merger between the two airlines.

According to The Associated Press ,“the pilots unions have agreed on a comprehensive joint contract, but they’re unable to concur to how seniority for the 12,000 pilots would work under a combined carrier.”

The dubious theory behind airline mergers is that putting two carriers together saves money, but concessions to labor to get a deal done my undermine that. It is also not clear that a newly combined airline can avoid the customer service problems early in the process. These troubles often drive customers away.

While the industry looks at a number of business combinations, pilots and other unions are pushing their agendas. The message is easy. If you want a merger, it is going to cost you.

Douglas A. McIntyre is an editor at 247wallst.com.

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