Microsoft Proposes New Deal with Yahoo
Computer giants Microsoft have said they are considering a deal with Yahoo which would not involve buying out the company.
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Microsoft?s previous offer to buy Yahoo for a $33 a share ? a figure which valued the company at $47.5bn ? was turned down. Last week Yahoo rebuffed billionaire investor Carl Icahn?s plan to oust the current ? ten members - Board of Directors over the failed merger.
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Now Microsoft says they are discussing an alternative transaction, but did not provide any details.
In a statement, Microsoft said that it ?is not proposing to make a new bid to acquire all of Yahoo at this time, but reserves the right to reconsider that alternative?in light of developments”
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Microsoft have stressed that the deal may or may not follow from Sundays statement. After Microsoft?s statement, Yahoo confirmed it was looking at a number of ?value maximizing? alternatives with Microsoft, and would assess offers made by the organization.
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The internet search group said its board would have to evaluate each of the alternatives ?including any Microsoft proposal?with a focus on maximizing stockholder value.?
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Analysts agree that any arrangement that Yahoo can have with Microsoft could save them from a hostile takeover from Mr Icahn ? who is amassing a stake in the company.
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Mr Icahn?s maneuver on Thursday followed much criticism over Yahoo?s decision, led by co-founder and chief executive Jerry Yang, to turn down Microsoft?s offer earlier this month to buy out the company. Yahoo had wanted Microsoft to increase its bid of $33 a share to $37.
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With Yahoo and Search Engine leaders Google recently trialing an advertising partnership for two weeks the company would be much safer and a less likely target for acquisition.
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The potential merge of Google and Yahoo unnerves Microsoft CEO Steve Ballmer. In a letter to Yahoo CEO Jerry Yang on May 3, he cited a Google partnership as a major reason for withdrawing his merger bid and added that a deal would hurt Yahoo’s future growth and raise serious antitrust issues as a consequence of the No. 1 and No. 2 search engines joining forces.
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Ballmer’s new proposal to Yahoo may be aimed at disrupting the Google deal, which has already prompted an antitrust inquiry by the Department of Justice.
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Kevin Johnson, a Microsoft president, said in an e-mail to employees Sunday in prelude to an advertising conference this week that his company is on the road to reviving its Internet business, which has lagged financially in the face of Google’s success. He spoke of efforts to be announced this week to overhaul some of its online properties including search and the MSN portal while bolstering advertising sales.
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“Regardless of the outcome of any new discussions,” he said about the Yahoo proposal, “it is important that we continue to move forward to strengthen our online services business. The fact is that we are not where we want to be in this business yet and we’ve been in this position longer than we’d all like.”
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