Yahoo Shareholder Legg Mason Tries to Get Tough With Microsoft, Fails

Nothing like negotiating through the press. Yahoo's second largest shareholder, Legg Mason, used the Wall Street Journal to tell Microsoft and Yahoo's other shareholders that Legg, which owns 7% of Yahoo stock, was not cool with Microsoft (MSFT) cutting its Yahoo (YHOO) bid:

Microsoft blundered with the letter this weekend" by threatening to lower its offer, Mr. Miller said. "Telling the shareholders you're going to take something away from them is not a way to get their support."

It's nice to see someone finally publicly stand up for Yahoo--other shareholders and Wall Street are increasingly throwing in the towel--but the news from Legg Mason was not all good. Specifically, the firm's star portfolio manager, Bill Miller, wasn't exactly categorical in his refusal to consider a lower bid. In fact, the way he phrased his remark almost suggests that he'd still take the money and run:

"If Microsoft lowers the price I'm not prepared to say that's better than Yahoo remaining independent," he said.

Miller also added that the current $29 bid is "not something he's too excited about." This quote especially suggests to us that, although he might not be too excited about it, he'd still take it.

Just as depressing for Yahoo management: Bill Miller now appears happy to take only $32 for his Yahoo stock, which appears to be significantly less than he wanted a month ago:

"If Microsoft raises the offer, the pressure shifts very quickly to Yahoo to negotiate," he said. "To me, bumping the number up a buck [from $31 a share], that would have a big impact psychologically on shareholders."

In February, shortly after Microsoft made it's original bid, Bill wrote in a letter to Legg Mason fundholders that Microsoft would need to enhance its bid to get the deal done. Although he didn't mention a specific price he wanted, he did invoke the $40 number that Yahoo itself threw out as a price that Microsoft had been willing to pay. So if Bill would now cheer an offer of $32, that can't be good news to Yahoo.

Also not good news to Yahoo: Miller reportedly dismissed the idea that Yahoo would be able to put together an alternative deal.

Wal-Mart Goes DRM-Free! *Yawn*

Wal-Mart is moving to DRM-free mp3s for their download store , and they've lost Sony BMG and Warner Music Group (WMG) along the way. But nobody really cares.

Why? Partly because no one cares what kind of media Wal-Mart sells online.But also because DRM-free music, basically unheard of two years ago, is now old hat. Amazon doesn't use it , MySpace Music will be mostly DRM-free , even new EMI exec Douglas Merrill said he's not a fan .

Oddly enough, Steve Jobs, who wrote an anti-DRM sort-of manifesto in February 2007, is now a bit of an odd man out. His iTunes store still sells DRM-wrapped music from three of the big four music labels. Yet it hasn't stopped him from becoming the biggest music retailer in the U.S .

Which is the real reason why Wal-Mart's move isn't a big deal: Consumers don't know or care about DRM -- if they do buy music online, they buy it from Apple. End of story.

Video Startup To Mossberg: Please Keep Talking About The iPhone!

The Web hubub over Walt Mossberg's casual aside about the iPhone, captured on video during an event last week, may have given the WSJ tech guru a mild headache . But it's been great for the guy who has the video!

Just ask Beet.TV 's Andy Plesser, who tirelessly interviews and tapes pretty much anyone who will stand still for his video camera. Actually you don't need to ask him. He'll tell you, via an unsolicited e-mail:

"The impact of the clip is completely unexpected and astonishing. Since Saturday, we've had about 90,000 video streams. At Beet.TV, we have about 600 videos and each get around 1000 streams, the Walt video is record breaking. The clip has been published everywhere: AppleInsider, Engadget, Gizmodo, CNET and Silicon Alley Insider, our favorite! I've tracked well of 100 incoming blogs which have raised my Technorati ranking up to around 560."

Thanks for the shout out, Andy! And some advice you probably don't need anymore: If you want to increase those streaming numbers, see if you can round up some iPhone footage.