Yahoo stock rises on Microsoft buy out rumors

The drama that currently surrounds Yahoo took another turn today when Reuters reported via unnamed sources that Microsoft is considering a bid to buy the long running Internet portal. The new rumor sent shares of Yahoo's stock up over 10 percent late in the day. The report claimed that Microsoft might bring in a partner for any Yahoo acquisition offer it might make. It's also possible that no such offer will be made due to an internal debate at Microsoft over any Yahoo deal.

Indeed, the report claims that one faction inside Microsoft wants a Yahoo buyout deal to go forward, saying that such a merger could take out one of its big rivals in the Internet content space, AOL. Another faction at Microsoft believes differently, saying that Yahoo doesn't have enough potential for future growth.

Microsoft has tried once before to purchase Yahoo. In 2008, Microsoft offered to pay $44.6 billion for the company. At one point, Microsoft raised the buyout offer by another $5 billion, or $33 a share. However, Yahoo rejected the offer saying that it undervalued the company. Even with today's price jump, Yahoo's current stock price is now around $16 a share.

Reuters story says that there are other possible bidders for Yahoo including Providence Equity Partners, Hellman and Friedman and Silver Lake Partners. The CEO of the China-based Internet company Alibaba has already indicated it is interested in Yahoo. Another possible company that could be in the Yahoo mix is Russia-based technology group DST Global.

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