Yahoo!'s Delaying Tactics

BURLINGAME, CALIF. -

In an effort to delay a proxy fight from Microsoft, Yahoo! said Wednesday that it has pushed back the deadline for nominating new board directors from March 14 until a future date, likely to be 10 days after it announces the date of its next annual meeting.

The extension buys the Sunnyvale, Calif.-based Internet giant a bit more time to look for ways to stay out of the Redmond software giant's clutches. In an e-mail sent on Wednesday to employees, Yahoo! (nasdaq: YHOO - news - people ) Chief Executive Jerry Yang and Chairman Roy Bostock said the extension will "enable our board to continue to explore all its strategic alternatives for maximizing value for stockholders without the distraction of a proxy contest. ... We believe we are making progress clarifying the many options available to us."

Yahoo! has been reportedly weighing deals with News Corp. (nyse: NWS - news - people ), Time Warner (nyse: TWX - news - people ) and Google (nasdaq: GOOG - news - people ) that would allow it to remain an independent company.

A deal with News Corp. could put Yahoo! in control of the media giant's MySpace social network and other Web sites. In exchange, News Corp. could take a stake in Yahoo! and gain access to its vast advertising network.

In a deal with Time Warner, Yahoo! could take over the media giant's AOL unit. In turn, Time Warner could take a stake in Yahoo!.

Yahoo! is also considering selling or outsourcing its search advertising business to rival Google.

Yahoo!'s stock closed at $28.67 Tuesday and dropped 3 cents a share in after- hours trading. Microsoft (nasdaq: MSFT - news - people ), which closed at $28.12, was up 3 cents in after-hours trading.

Industry experts say the likelihood of any one of these deals coming to fruition is slimmer than a tie-up with Microsoft, which launched its unsolicited bid of $31 a share for Yahoo! on Feb. 1. Microsoft's bid, valued at $44.6 billion at the time, is an attempt to catch up to Google in the burgeoning search advertising market. That offer, half cash and half stock, has since declined in value to $41.2 billion as Microsoft's stock has slid. Microsoft has said a merger with Yahoo! would produce a stronger No. 2 competitor to Google.

Yahoo! rejected Microsoft's offer on Feb. 11, saying it significantly undervalued the company. Yahoo! reportedly thinks the deal could get done at $40 a share. But Microsoft has yet to offer a penny more--and it has indicated that it would launch a proxy fight to gain control of Yahoo!. Microsoft was expected to file a new slate of board directors to Yahoo! on Mar. 13, the eve of the original deadline.

Yahoo!, which filed the board-nomination extension with the Securities and Exchange Commission on Monday, wouldn't say when it plans to announce the date of its annual shareholders meeting, and it's unclear whether there is a time frame for Yahoo! to announce the date. Yahoo! held its last meeting on June 12, 2007, and must hold its next one within 13 months, according to incorporation bylaws.