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Microsoft Preps a New Run at Yahoo

Has been recruiting partners for another effort to vivisect Yahoo

By Jim O'Neill,  Newser User

Posted Jul 2, 2008 8:18 AM CDT

(Newser) – Microsoft is back in pursuit of Yahoo, the Wall Street Journal reports, with the company in talks with both News Corp. and Time Warner as potential partners for a restructured deal to buy the search giant. Yahoo has been in Microsoft’s sights for nearly six months, but initial efforts to buy the entire company collapsed, and Microsoft has since been looking instead to acquire the search business and spin off the rest.

The development comes as both sides regroup after the failed deal launched with a $33 a share bid by Microsoft in January. Yahoo has seen its share price drop 27% since May, and Microsoft is down 18%. Both are trying to placate upset shareholders, with Yahoo facing a proxy fight led by Carl Icahn. The Journal also reports that in mid-May Yahoo CEO Jerry Yang offered to sell the company to Microsoft for about $33 a share—a price Yahoo had earlier rejected and Microsoft had withdrawn. Microsoft declined the offer.

This Jan. 7, 2008 file photo shows the Yahoo tent at the Consumer Electronics Show (CES) in Las Vegas.
This Jan. 7, 2008 file photo shows the Yahoo tent at the Consumer Electronics Show (CES) in Las Vegas.   (AP Photo/Paul Sakuma, file)
Microsoft CEO Steve Ballmer
Microsoft CEO Steve Ballmer   (AP Photo)
Steve Ballmer, CEO of Microsoft,.
Steve Ballmer, CEO of Microsoft,.   (AP Photo/Joerg Sarbach)
This combination of two file photos shows Microsoft CEO Steve Ballmer, left, and Yahoo CEO Jerry Yang.
This combination of two file photos shows Microsoft CEO Steve Ballmer, left, and Yahoo CEO Jerry Yang.   (AP Photo)
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