MS, Yahoo meet over takeover bid

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Microsoft Corp has met with Yahoo Inc to discuss the software maker’s unsolicited takeover bid, a breakthrough that could be the first step towards a friendly deal between the two rivals.

The meeting occurred on Monday near Yahoo’s Sunnyvale headquarters, according to a person familiar with the situation. The person spoke on the condition of not being identified because the preliminary talks haven’t been formally disclosed.

No investments bankers attended Monday’s meeting, nor was there any discussion about whether Microsoft is willing to raise its offer, initially valued at $44.6 billion, or $31 per share.

Yahoo’s board already has rejected that bid, arguing the company’s Internet franchise is worth more.

Although it’s unclear whether Microsoft chief executive Steve Ballmer and his Yahoo counterpart, Jerry Yang, attended Monday’s meeting, senior management from both companies were on hand.

The gathering, first reported by The Wall Street Journal, gave Microsoft its first chance to sell Yahoo on the rationale for the proposed marriage since the software maker unveiled its plans six weeks ago.

Since then, Yang has been exploring different ways to ward off Microsoft. The alternatives have included possible alliances with Internet search and advertising leader Google Inc, News Corp’s MySpace.com and Time Warner Inc’s AOL.