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Rory Cellan-Jones

MicroHoo - talking again

  • Rory Cellan-Jones
  • 18 May 08, 22:13 GMT

When Microsoft walked away from a bid for Yahoo two weeks ago, there was plenty of speculation that it would be back by the end of the year, possibly with a lower offer. Well it has come back, and a lot faster than anyone expected.

Microsoft confirmed tonight that it is talking to Yahoo again - though its rather mysterious statement talks of "an alternative that would involve a transaction with Yahoo but not an acquisition of all of Yahoo." It goes on: " Microsoft is not proposing to make a new bid to acquire all of Yahoo! at this time, but reserves the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo! or discussions with shareholders of Yahoo! or Microsoft or with other third parties. "

Right - so what is this transaction? It is difficult to see which part of Yahoo's business Microsoft would want to buy - and Yahoo to sell - without taking full control of the company. After all, if it's the search business, Yahoo will be left as a shell if it hands that over - so it might as well just negotiate a decent price for the whole kit and caboodle.

But presumably Carl Icahn's move to nominate an alternative board and go into battle with Jerry Yang over the future of Yahoo has concentrated minds. Perhaps Mr Yang and Microsoft's Steve Ballmer have realised that it's in both their interests to kiss and make up. After all, neither emerged particularly well from the noisy break-up of their marriage talks.

Comments

  • Comment number 1.

    I think its a good news for both companies.

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  • Comment number 2.

    Hello Rory,

    I'm amazed at how quickly Microsoft has gone back to Yahoo - but I'm even more amazed that it is not with a full-on takeover bid.

    That's clearly what they wanted and in my opinion, what they needed if they were to stand a chance of gaining ground on Google.

    Google needs some competition, with what's becoming a near monopoly in search and search advertising. I'm just not sure that a joint Microsoft / Yahoo venture is goinig to be the answer.


    Jim Connolly


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  • Comment number 3.

    I'm thinking 49% stake with certain guarentees regarding knowledge sharing, several places on the Yahoo board and of course an agreement not to do business with Google.

    Complain about this comment (Comment number 3)

  • Comment number 4.

    zzzzzzzzzzzzzzz

    Please wake me up when Micro$oft have got rid of this Ballmer character and have got some creativity back in the company.

    Right now, they look like a directionless company being run by a Sales guy... oh wait, they are.

    Personally, I want Micro$oft to waste their money and buy Yahoo. I'm going to love to see Ballmer explain to shareholders what the money was spent on in 2 years time when Microhoo (or Ya$oft) are still languishing in a distant 2nd place to Google.

    And no, I'm not a Google lover. I just know a good service when I see one, and right now Google is the only search engine I use, because it WORKS and it WORKS WELL. I see Micro$oft desperately bidding for Yahoo so they can buy their way to success - it's not going to happen this time Ballmer, so better get used to being 2nd (or 3rd).

    Complain about this comment (Comment number 4)

  • Comment number 5.

    Last week I posted a blog ( and pondered whether Microsoft would come back with another offer for Yahoo! following their failed initial attempt.

    Alas they have, further proving their desperation...

    John Anderson
    www.essentialmarketer.com

    Complain about this comment (Comment number 5)

 

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