Asia May Be Yahoo's Trump Card

A revised Microsoft bid for Yahoo may be heavily influenced by Yahoo’s Asian interests, reports the Wall Street Journal. Microsoft execs toured Asia in December and concluded that they needed a local partner there. Yahoo holds large stakes in a Korean auction site, a major Chinese search engine, and Yahoo Japan. These footholds, while passive investments now, may be the key to success in Asia, which an analyst calls "an underdeveloped but massive market."

Yahoo’s overlooked Asian holdings, worth $9 billion to $14 billion, could justify a Microsoft decision to sweeten its $31-a-share offer, the Journal notes. Yahoo Japan has more than 42 million users, compared to Google’s 21.63 million, and even eBay backed down before the Japanese juggernaut. Yahoo’s rejection of Microsoft’s initial offer cited “substantial, unconsolidated investments in China and Japan.” (More Yahoo stories.)