Posted Sep 02, 2008 10:27am EDT by Henry Blodget

Back in the days when Microsoft was an unabashed monopoly, the company's strategy was "link and lever" -- as in link new products to the Windows operating system and lever them into a dominant market position. Those who once used the market-leading Lotus 123, Notes, WordPerfect, and other programs will remember how effective this strategy was.

I figured that while the market was just bouncing around today that I would lead you to a great story about the richest man in the world. The Bill and Melinda Gates Foundation is helping millions of people throughout the world, many of whom live in underdeveloped and disease ridden nations.

Microsoft announced that PSD President Kevin Johnson will be leaving the company. Microsoft Corp. also announced that the Platforms & Services Division (PSD) will be split into two groups: Windows/Windows Live and Online Services, with both groups reporting directly to CEO Steve Ballmer.

How is Google faring in this ailing US economy? Google’s earnings growth for the second quarter was a disappointment for investors, raising fears that the online search leader has finally stumbled.

Yahoo! Inc. confirmed that it has rejected, again, a joint proposal from Microsoft Corporation and Carl Icahn for a complex restructuring of Yahoo! that would include the acquisition of Yahoo!'s search business by Microsoft. Yahoo!

Carl Icahn has issued a letter to yahoo shareholders detailing the summary of his talks with Microsoft CEO Steven Ballmer. Here's an excerpt from the letter. During the past week I have spoken frequently with Steve Ballmer, CEO of Microsoft. However, Steve made it clear to me that if a new board were elected, he would be interested in discussing a major transaction with Yahoo!...

The Wall Street Journal reports that Microsoft is talking to Time Warner Inc. and News Corp., among others, about joining it in a deal that would effectively lead to Yahoo's breakup. Microsoft, along with other allies like Time Warner Inc. and News Corp., each buy a piece of Yahoo! Inc. Microsoft gets the search business, and the others get bits and pieces of other Yahoo assets.

Yahoo's employees are jumping ship, but reports coming in now indicate that its not just a 'natural flow', but has been triggered and is being actively encouraged by certain actions on the part of both Yahoo & Microsoft, and I'm not talking about the ill-fated buyout.

Yahoo! Inc. has just announced that talks between it and Microsoft Corp. for a full or search limited buyout by Microsoft have ended with Microsoft refusing to go for a full buyout of Yahoo! Inc. and Yahoo refusing a sale of its search division to Microsoft. Excerpts from the press rlease below, and more updates coming later.

So Yahoo! Inc. posted an FAQ on its internal intranet site for Yahoo! employees on June 10, 2008, explaining its position and thinking with regards to the 'Change in Control Employee Severance Plans'. The full letter, along with some additional answers from me.

Icahn states that he will terminate the faux severance plan if he gains control and asks Bostock to "stop dancing around the subject and publicly offer to sell the company to Microsoft for $34.375 per share and promise to cooperate completely."

Yahoo!

Delaware Chancery Court Judge issues ruling to unseal court documents realted to a Yahoo shareholder lawsuit. The documents show that Yahoo rejected a $40 per share offer from Microsoft in January. And that Yahoo cooked up a costly severance plan to make a Microsoft takeover unfeasiable.

End of the road for Yahoo! Inc. as a seperate entity and it's time to put your money where your mouth is. Here's what's going to happen pretty soon. The Yahoo Board and Microsoft will announce a Microsoft buyout of Yahoo for either $34 or $35. Why now? The Yahoo board meeting isn't till the end of July. Is Yahoo throwing in the towel?

Interesting article by Tim Sweeney.

"I had to laugh when I heard rumors concerning the new Microsoft-Yahoo negotiations. Let’s see, Jerry Yang turned down Microsoft’s (MSFT) original offer because (a) it substantially undervalued the long term prospects of the company, and (b) he wanted to keep the unique culture and spirit of Yahoo (YHOO)."