Microsoft Says Made Fair Offer to Yahoo

MUMBAI (Reuters) -Microsoft Corp believes it has made a fair offer to acquire Yahoo andis committed to bolstering its digital advertising capabilitiesirrespective of the outcome, its chief operating officer said.

"We believe we’ve made a very fair offer to Yahoo’s board ofdirectors," Kevin Turner said at a news conference in Mumbai to launchstrategic initiatives with India’s HCL Infosystems Ltd.

"Currently, it’s in their hands to decide the outcome of that offer," he said.

Microsoft had threatened on Saturday to launch a hostile bid forYahoo and could lower its offer of $42.4 billion in about three weeksif it does not get a deal, which Yahoo argues is worth more thanMicrosoft’s bid.

The New York Times reported this week News Corp was in talks to join Microsoft’s bid for the Web pioneer.

The offer for Yahoo was in line with Microsoft’s aim to enhance its digital advertising capabilities, Turner said.

"We will continue to drive marketshare from a search standpointwithin the consumer space, and that’s a strategy we’re committed to inthe long term," he said.

The offer for Yahoo was "a tactic and a strategy" toward that goal, Turner said.

"The rest is now up to their board … With or without theacquisition we are committed to becoming a world class digitaladvertising company."

Yahoo announced on Wednesday a test to outsource Web searchadvertising to Google Inc, which sources say is part of a three-wayalliance that would combine Yahoo with Time Warner Inc’s AOL instead ofMicrosoft.

But a joint Microsoft-News Corp bid would create a more formidablecompetitor to Google by bringing together three of the biggest Web sitepublishers: Yahoo, Microsoft’s MSN and News Corp’s MySpace socialnetwork.

Any of the potential mergers would fundamentally change business onthe Web as growth slows dramatically after a decade of explosive growth.

(Reporting by Rina Chandran; Editing by Ranjit Gangadharan)