Microsoft disbands board slate for Yahoo

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San Francisco, May 9:: Microsoft Corp has dissolved its proposed slate of nominees to Yahoo Inc's board, according to a source familiar with the situation, after deciding not to launch a hostile takeover.

The software maker released the 10 nominees from their commitments to the company, the source said on Thursday, indicating Chief Executive Steve Ballmer was firm in his resolve to pull back rather than mount a proxy fight.

Microsoft withdrew its $47.5 billion bid for Yahoo last weekend after the two sides failed to agree on price.

"The market may wish that the Yahoo deal may come back together, but Microsoft at least at this point assumes it's over," Microsoft Chief Research and Strategy Officer Craig Mundie saidin an interview in Jakarta.

Yahoo's stock, which plunged 15 percent on Monday, has partly rebounded on investors' expectations that a deal might still be done. The stock closed up 58 cents, or 2.3 percent, at $26.22 on Thursday, but shed 27 cents in after-hours trade.

By releasing the slate, Microsoft frees nominees to sign up for other slates that may be assembled by Yahoo shareholders upset over Chief Executive Jerry Yang's failure to seal a deal.

Members of Microsoft's proxy board have been approached by Yahoo shareholders weighing whether to nominate their own alternative slates, the Wall Street Journal reported.

But analysts said there was only a very short window for such shareholders to act, since any nominations must be made before May 15. Yahoo has set its annual meeting for July 3.

"May 15, which is next week, is not enough time for some other investor group besides Microsoft to put together a slate of directors," said Shirley Westcott, a managing director of policy at Proxy Governance, an independent advisory firm.

Dissident shareholder Eric Jackson, who leads a group of investors with a combined 2 million Yahoo shares, said he has been calling "lots of people in the last few days who might serve on a slate" but refused to disclose names.

Although Microsoft never filed its proxy slate with regulators, sources familiar with the matter have said that the company had seriously entertained mounting a proxy campaign before deciding to withdraw its offer for Yahoo.

Former Nextel Partners CEO John Chapple, former Grey Global Group CEO Edward Meyer and Jaynie Studenmund, former chief operating officer of Overture Services, which was acquired by Yahoo, were among the nominees, according to news reports.

Microsoft declined to comment.