Yahoo To Microsoft: Take Hike, Our Business Strong

Yahoo (YHOO) has conditioned the market for its own letter responding to Microsoft's threat (MSFT), which will reportedly say that

• Yahoo's business is strong (contrary to Microsoft's assertions)
  
• Yahoo is NOT opposed to selling to Microsoft --at a higher price. This is obviously designed to address the charge that Yahoo has a patholigical block against selling to Microsoft.
  
• Yahoo has asked Microsoft for anti-trust information that Microsoft has refused to provide. (Translation: We're the reasonable ones here)
  

The only meaningful point here is the first one. As we said on Saturday, we think Yahoo's only escape from Microsoft's ultimatum is to have posted a strong first quarter and raise its outlook for the rest of the year. This would bolster Yahoo's argument that it is worth more, especially since the stock market and Google have bounced off its recent lows. It would also make it very difficult for Microsoft to cut its bid and still have Yahoo shareholders take it seriously.

Meanwhile, the Post says Yahoo is still negotiating seriously with AOL about a deal in which Time Warner spins AOL into Yahoo in exchange for 20% of Yahoo's equity. This would make great sense , and the companies should have done it six months ago. The only way the move will help stave off Microsoft, however, is if Yahoo's own performance is strong.

Ad Platform Operative Adds NAVTEQ

New York-based Operative , maker of ad management software, announced NAVTEQ will use the platform to manage advertising inventory on mobile devices and the Web, including for Traffic.com. Operative makes a software "dashboard" to manage ad buys across multiple platforms and devices; the addition of NAVTEQ gives the company the capability to offer mobile and location-specific ad buys.

Ultimately, the company would like to add TV, radio and other offline media to the system to facilitate cross-platform ad campaigns. So would Google , Microsoft , AOL, and ContextWeb , and many others, so for Operative, time is of the essence. Operative's clients include Fox Interactive Media, NBC U, MSN and The Wall Street Journal.

Facebook Scrabble: Like Scrabulous, Except You Can't Play

Mattel and RealNetworks have released a legal version of Scrabble for Facebook. Who cares? Brothers Rajat and Jayant Agarwalla, who have created Scrabulous, a very popular knock-off version of the game for the social network.

When last we checked in on the Agarwallas , they were supposedly negotiating with Mattel, Real (RNWK), Hasbro and Electronic Arts (ERTS), all of whom have rights to the game. But the two brothers were said to be holding out for too much money. Presumably the introduction of a legal competitor will help get them to a reasonable price.

But not just yet. The brothers' version has 565,659 active users; Mattel and Real's has all of 1,779. We'd compare the two, but we can't: Hasbro has the rights to Scrabble in the U.S. and Canada, so Mattel and Real's version isn't available (legally) to residents of those two countries.

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