Yahoo Investor Wants More Microsoft Money

One of Yahoo's big institutional investors chatted with Microsoft CEO Steve Ballmer about sweetening the deal.

With Microsoft's stock price drifting down since announcing interest in acquiring Yahoo last week, the company with the most to make on the buyout wants to know if Microsoft will toss a little more money at Yahoo shareholders.

New York Post said Silicon Alley Insider, which listed five reasons why Microsoft would respond to a request to raise the bid with a less than positive answer:

•  No other bidders
•  No other good alternatives
•  No negotiating leverage (for Yahoo)
•  Likely outrage and lawsuits if Yahoo tries to walk away.
•  Pressure on Microsoft by already annoyed Microsoft shareholders

We aren't seeing any way out of the bid for Yahoo, short of rejecting it and trying to drag out the shareholder litigation as long as possible. Capital Research and Management and other institutional shareholders who watch a 62 percent premium offered for their shares evaporate will not be pleased with a Yahoo rejection.