Board-Room Connections Suggest Microsoft and Yahoo Be Talking Via a Back Channel

(NewsVisual, powered by IntellectSpace) -- Despite a report in Tuesday’s Wall Street Journal claiming that talks had broken off over the proposed buyout, Microsoft Corp (NASDAQ:MSFT) and Yahoo! Inc (NASDAQ:YHOO) could still be conducting back-channel negotiations in order to resolve their differences.

The Journal suggests that while Microsoft will tenaciously adhere to its initial bid of $44.6 billion, it will be prepared “to lay a long siege” against Yahoo until the California company relents and accepts the software titan’s original offer.

"While speculation has swirled that Microsoft was poised to raise its bid, Microsoft is instead biding its time. The software giant likely hopes to use the potential of a sweetened offer to lure Yahoo into serious discussions. So far the two sides have only had one meeting," The Journal said in the article.

Yet this report discounts the notion that behind-the-scenes talks among the two companies’ Directors could be ongoing.

NewsVisual created an IntellectSpace Knowledge Map that demonstrates the likelihood of strong personal connections among the members of the two companies’ Board of Directors.

The first connection runs through the investment-banking firm Morgan Stanley.  Microsoft Director Charles H Noski and Yahoo Chairman Roy Bostock would certainly be acquainted with one another since they both currently serve on Morgan Stanley’s board.

Given Bostock’s influence within Yahoo, it’s highly probably that Microsoft would rely on Noski as a back channel for keeping the buyout negotiations open.

The Knowledge Map also illustrates another potential axis of connection between the Yahoo and Microsoft board rooms that lies through Stanford University.

Although it’s unlikely that they were classmates because of their age disparities, Yahoo CEO Jerry Yang, 37, could have a personal connection to Microsoft Directors Reed Hastings, 46, and David F Marquardt, 58, through Stanford’s alumni organization or one of the University’s other social networks.

Anyone of these personal connections that the Map depicts could serve as a conduit for keeping the talks between Yahoo and Microsoft on life support.

Click here for an interactive and fuller version of this IntellectSpace Knowledge Map.

(Note: the information contained and presented in Knowledge Maps is public information from the Securities and Exchange Commission of the United States of America).