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80,258 News Articles

Microsoft continues with solo bid for Yahoo

Bid to go ahead despite discussions with News Corp

The Wall Street Journal (WSJ) reports that sources close to Microsoft believe the software company still intends to pursue Yahoo on its own, despite rumours that the software giant plans to team up with News Corp in a joint bid.

In addition, Yahoo's board of directors failed to reach any decision after meeting on Friday to discuss the path the company should take, the WSJ said.

Microsoft and News Corp, publisher of WSJ, declined to comment.

According to the report, Yahoo's advisers gave the directors their opinions of Yahoo's options, which include negotiations with Time Warner's AOL and Google, or talking with Microsoft about its unsolicited takeover bid. Both Yahoo and AOL declined comment.

People familiar with the matter told the WSJ that Time Warner had been expecting the Yahoo board to move closer to supporting a deal with AOL. That the board took no action might mean the directors are hesitant about merging with AOL.

However, one person told the WSJ that Time Warner is continuing its discussions with Yahoo. That deal calls for Time Warner to fold AOL into Yahoo then make a cash contribution in return for a 20 percent equity stake, people familiar with the matter told the WSJ. Under the deal, AOL would be valued at about $10bn, excluding AOL's dialup internet-access business, the WSJ said.

Yahoo has also been talking with Google. Last week the two companies announced a two-week test in which Yahoo will deliver relevant web advertising from Google alongside its own search results. Yahoo and Google are looking into a more extensive search-advertising deal, although antitrust experts say such a deal would not pass regulatory muster.

Meanwhile, Microsoft CEO Steve Ballmer on April 5 said Yahoo had three weeks to accept its $42bn takeover offer or it would face a battle to replace its board and possibly a lower offer. Yahoo responded that it was open to considering a Microsoft takeover, but it wanted a higher offer.

In February, Yahoo rejected Microsoft's unsolicited $44.6bn stock-and-cash offer, saying that it undervalued the company. The deal is now worth about $42bn because of a drop in Microsoft's share price.


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