Microsoft founder Bill Gates apparently believes the company shouldn't raise its offer price for Yahoo Inc.
No surprise there. The Redmond giant's market value has fallen sharply since Feb. 1, the day it offered to buy Yahoo for roughly $44.6 billion. Between Jan. 31 and Feb. 19, Microsoft lost 13.5 percent, or about $41 billion, in market value--enough to buy another Yahoo.
I still think Yahoo is not worth what Microsoft wants to pay. But the greater folly is that the search-engine company's management reportedly is holding out for a higher offer and looking to ally with News Corp. or Google Inc.
In an interview with a news agency, Gates dropped a hint that Yahoo's managers should take seriously: Microsoft is angling for a bigger presence in online advertising, but it "will do that with or without Yahoo."
If Microsoft doesn't pursue the deal, Yahoo's stock price--up more than 50 percent since Microsoft's offer--will plunge just as quickly back to the dismal level at which it languished only a month ago.