Microsoft Reopens Talks With Yahoo!

20th May 2008

On Sunday 18 May 2008, two weeks after withdrawal of its offer to Yahoo!, Microsoft has issued a statement, regarding its continued efforts to improve their online services and advertising business.

In a brief formal announcement Microsoft said have resumed talks with Yahoo! The talks are not about acquiring Yahoo! but rather to find an alternative transaction that would help Microsoft to improve its services, and also help Yahoo! in the bargain.

Microsoft + Yahoo! logo However, Microsoft have also mentioned that the company reserves the right to reconsider the original option of buying over Yahoo! entirely, depending on the circumstances that may arise in the near future, following talks with Yahoo! or the shareholders of Yahoo! or Microsoft or any other concerned party.

This change of sentiment, following the statements issued earlier by Microsoft on withdrawal of their original offer, may very likely have something to do with the ongoing shareholder unrest following the failure of the original deal, especially the threats issued by Carl Icahn to have the entire board of directors of Yahoo! replaced during the next shareholder meeting.

According to the Financial Times, Steve Ballmer, Microsoft’s chief executive, had highlighted Microsoft’s interest in the Yahoo! search business when he abandoned his pursuit of a full acquisition. In a letter to Yahoo at the time, he said Microsoft had dropped its offer partly because of a potential search advertising alliance between Yahoo and Google, which had been under discussion for some weeks.

Yahoo! has also issued statements to the effect that they are willing to consider any option that will maximise their strategic value. As of now nothing has been finalised.

Tags: mergers-and-acquisitions, microsoft, ppc, search, yahoo, yahoo-search-marketing

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2 Responses to “Microsoft Reopens Talks With Yahoo!”

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Becky : 20 May 2008 at 8:57 pm

If Yahoo and Microsoft merge, will they be able to compete with Google?

http://www.tradeingroups.com/microsoft-acquires-yahoo/

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Yahoo! Board Threatened As Icahn Supporters Rally | AccuraCast Search Daily News : 27 May 2008 at 11:48 am

[...] Yahoo! is trying to fend of Icahn’s advances to replace the board by delaying their 3 July 2008 shareholders meeting to the end of the month. In the meantime the current board of directors at Yahoo! need to either fix an alternative deal with Microsoft buying only part of the company or an advertising agreement with Google that could inject $1 billion revenue per year. [...]

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