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.

Report a problem with article
Previous Story

iPhone 4S fails to impress Twitter users

Next Story

Italian Wikipedia in danger of being closed

9 Comments

Commenting is disabled on this article.

Bing needs help and it needs it FAST. Absorbing every trace of Google's competition is a good strategy, but not enough to put them over the top. I think they should reach a deal with AOL too (for ad/marketing purposes) if they really want to challenge Google.

bjoswald said,
Bing needs help and it needs it FAST. Absorbing every trace of Google's competition is a good strategy, but not enough to put them over the top.
I tend to agree, but is Yahoo really the web property that it was a few years ago? I use Yahoo for one thing every year: Fantasy Football. I do not know anyone that uses them for email (it's terrible), nor do I know anyone that actually visits the website. Microsoft already has a deal with them for Bing search, so why bother paying over $10 Billion for a company that has proven time and again that it is irrelevant. When was the last time that anyone said something good about Yahoo? I cannot even remember their last product launch that resulted in positive news.
bjoswald said,
I think they should reach a deal with AOL too (for ad/marketing purposes) if they really want to challenge Google.
It's a sound plan, except that Google already has an ad and marketing deal with AOL, among other blocks to a Microsoft deal with AOL.

http://www.google.com/intl/en/...ressrel/twaol_expanded.html

Jebadiah said,
Most idiotic acquisition ever.

why? they are half the price they were before and microsoft could make way more money off of a buy out then just giving them money for their own adds