Yahoo rallies the troops

February 6, 2008, 4:31 PM UTC

By Michal Lev-Ram

When do CEOs file their rally-the-troops internal memos with the U.S. Securities and Exchange Commission? When they’re in a fight-for-your-life battle with Microsoft.

Yahoo chief Jerry Yang took the step of copying regulators on an all-hands e-mail about Microsoft’s hostile $45 billion bid for Yahoo (YHOO) that was sent to company employees Wednesday morning.

In a memo titled “Building on our Strengths,” Yang wrote, “As we’ve said, no decisions have been made about Microsoft’s proposal. Our board is thoughtfully evaluating a wide range of potential strategic alternatives in what is a complex and evolving landscape.”

Yang added that the company has a lot to be excited about — including a digital music partnership with Rhapsody and a newly-launched version of Zimbra, the company’s suite of e-mail and collaboration tools for small businesses.

According to current and former Yahoo employees, selling to Microsoft is the last thing that co-founder Yang wants to do. “Nobody’s blood runs purpler than Yang’s,” says Jeff Weitzman, former senior director of client services at Yahoo.

The memo is another sign that Yang may be worried about losing key “Yahoos” as the battle with Microsoft drags on.

“As we look to build on the progress we’ve been making, I want to make sure you all realize how essential you are to Yahoo’s success,” he wrote in the e-mail.