TIMELINE: Microsoft's pursuit of Yahoo
(Reuters) - Microsoft Corp said on Monday it is ready to resume talks to buy Yahoo Inc, but not with the current leadership, in a boost for activist investor Carl Icahn's proxy fight to replace Yahoo's board of directors.
Shares of Yahoo jumped nearly 11 percent to $23.68.
The following is a timeline of key events in Microsoft's pursuit of Yahoo, stretching back more than two years, when the Web pioneer's financial results began weakening.
Early 2006 - Yahoo begins to report a string of weak quarterly results that have stretched on since then, reflecting competitive missteps by the company, market share gains by rival Google Inc, changes in the online advertising landscape and weakening spending in some ad segments.
Late 2006/early 2007 - Microsoft and Yahoo begin preliminary talks on various partnerships, including a merger.
2007
February - Yahoo, under the leadership of previous Chief Executive Terry Semel, tells Microsoft it is not the right time to discuss a takeover, as the Yahoo board sees great potential in its new advertising technology and by making internal organizational changes.
June 12 - A strong minority of Yahoo shareholders challenges Yahoo's direction, as CEO Semel comes under fire. Nearly a third of votes cast at the company's annual shareholders' meeting oppose some of Yahoo's directors.
June 18 - Yahoo co-founder Jerry Yang takes over as chief executive as Semel steps aside. Semel remains Yahoo chairman.
2008
January 31 - Microsoft CEO Steve Ballmer makes a $44.6 billion, $31-per-share, cash-and-stock takeover offer to Yahoo's board. Semel resigns as chairman and is replaced by Roy Bostock.
February 1 - Microsoft makes the offer public. Its shares fall 6.6 percent to $30.45; Yahoo shares rise 48 percent to $28.38.
February 11 - Yahoo rejects the Microsoft offer as too low.
Mid-February - Yahoo begins talks with Time Warner Inc on a deal to combine Time Warner's AOL unit with Yahoo in exchange for Time Warner taking a stake in the merged company. MySpace owner News Corp and Yahoo also discuss a tie-up.
March 18 - Yahoo gives financial forecasts for the next two years, in an effort to prove it is worth more than Microsoft bid.
March 28 - One of seven face-to-face meetings takes place between the "senior-most" executives of Microsoft and Yahoo to discuss the bid. Yahoo asks how Microsoft would handle regulatory issues, including antitrust concerns, in a merger.
April 4-7 - Microsoft is reevaluating its bid for Yahoo because the Internet company may have lost value since Microsoft first made its off. Microsoft sets a three-week deadline for Yahoo to reach a deal or possibly face a proxy fight. Yahoo again rejects Microsoft's bid.
April 9 - Yahoo says it will test Google search ads on its site, which could be more lucrative than selling its own search ads. Talks with Yahoo and Time Warner/AOL heat up.
April 15 - At another meeting between Yahoo and Microsoft executives and their financial advisers, Yahoo asks about Microsoft's integration plans and Yahoo raises a list of "key non-price deal terms" it believes are critical.
April 26 - Microsoft's deadline to Yahoo passes.
May 3 - After several earlier meetings, Yang meets Ballmer in Seattle. Microsoft verbally raises its offer to $33 a share, or $47.5 billion, from its original $31/share bid. Yahoo wants $37 per share, or about $5 billion more. Late in the day, Ballmer calls off the talks.
May 15 - Carl Icahn proposes a full dissident board slate for election at Yahoo's annual shareholder meeting in July. Icahn says he now holds a 4.3 percent stake in Yahoo, including 9.9 million shares and 49 million call options. Yahoo Chairman Bostock replies to Icahn that "none of the alternatives we are considering would preclude us from entering into a transaction with Microsoft or any other party."
May 18 - Microsoft says it has raised with Yahoo an "alternative" deal that would not involve the software maker buying all of the web company but says it could reconsider pursuing a full acquisition. Microsoft proposed buying Yahoo's search business and as part of the deal Microsoft would buy a stake in what remains of the company.
May 22 - One Yahoo board member retires and the company nominates its nine remaining directors for reelection, setting the stage for a showdown with Icahn. It postpones its annual shareholders' meeting from sometime in early July.
June 6 - Icahn says Yahoo should offer to sell itself to Microsoft of $34.375 a share. Throughout June, the two sides exchange a series of letters in an acrimonious war of words.
June 12 - Yahoo announces search advertising deal with Google for up to 10 years, and says talks with Microsoft have ended. Yahoo forecast an $800 million annual revenue opportunity from the Google deal, and a $250 million-$450 million boost to cash flow in the first 12 months. U.S. lawmakers are expected to scrutinize the deal on antitrust concerns.
June 13 - Microsoft says it had offered to pay $8 billion, or $35 a share, for a 16 percent equity stake in Yahoo, and $1 billion in up-front payments to acquire Yahoo's search advertising assets. A revenue-sharing deal would have given Yahoo an added $1 billion in annual operating income, it says.
June 18 - The top Republican on the U.S. House of Representatives Energy and Commerce Committee, Joe Barton, sends letter to Yahoo expressing concern about the effect of the Google deal on web users' privacy and advertising rates.
June 26 - Yahoo unveils a reorganization plan that creates four operational units under President Susan Decker. The move comes amid the departure of several senior executives from the company.
The same day, Icahn files his proxy for Yahoo, saying that if his slate is elected, it will seek to hire a new CEO to replace Yang, eliminate a severance plan, and sell Yahoo to Microsoft for at least $33 a share.
July 2 - Sources say Microsoft and Yahoo continue to hold separate talks with potential media partners, including Time Warner and News Corp.
July 7 - Microsoft says it is interested in discussing a major transaction with Yahoo, such as the purchase of all or part of the company, only if Yahoo elects a new board. Microsoft says it has concluded that it cannot reach an agreement with Yahoo's current management.
July 22 - Yahoo to announce second quarter results.
August 1 - Yahoo annual shareholders' meeting.
Sources: Statements from Microsoft, Yahoo, Google and Icahn; Reuters stories.
(Compiled by Tiffany Wu, Eric Auchard and Peter Henderson; editing by Phil Berlowitz)
