MSFT: AT&T Not Interested in Making Counter-Offer for YHOO

AT&T and Google are the only two likely suitors that can really afford to try to outbid Microsoft for Yahoo. For the reasons outlined here, we don't think Google will make a bid. We doubt that AT&T will make a bid, either--especially after talking to a senior Microsoft executive this morning.

As we reported, the executive said that AT&T encouraged Microsoft to make a bid for Yahoo and has no interest in making an offer itself. Obviously it is in Microsoft's interest to create a perception that there are no other potential bidders, but we think this is likely the case.

A Microsoft-Yahoo deal is a much better strategic and cultural fit than AT&T-Yahoo (the idea of combining AT&T and Yahoo is almost laughable).  Microsoft is also in a much stronger financial position than AT&T and would almost certainly win a bidding war. Consequently, we suspect that even if AT&T is considering a counter offer, they will quickly think better of it.

See Also:
Microsoft Insider on brand, retention, competitive offers, and Yahoo reaction
Complete Coverage: Microsoft's Bid For Yahoo!
Bidding War for Yahoo? We Doubt It
Microsoft Conference Call: No Color on Yahoo Reaction
Analysis of Microsoft Bid for Yahoo: Brilliant Move, Deal Going Through
Micro-Hoo: Combined Financial Performance (including cost synergies)
Microsoft Letter to Yahoo Board