updated 08:45 am EDT, Wed July 2, 2008
MS Joint Yahoo Bid Rumor
Microsoft is actively exploring bringing other companies into a deal that would dismantle Yahoo as it's known today, says the Wall Street Journal. The newspaper cites anonymous sources aware of discussions who say Microsoft is still interested in buying just Yahoo's search business but has asked both News Corp. and Time Warner about merging what would be left of Yahoo into one of their respective properties, such as MySpace or AOL. A meeting between Microsoft and Yahoo was scheduled for Monday but canceled because Microsoft has so far been unsuccessful in lining up a partner, according to the report.
Both News Corp. and Time Warner have previously been identified as potential partners for Yahoo, the latter having sought out deals the two companies as attempts to sour any efforts by Microsoft to bid at its original price.
The news also brings word that neither Microsoft nor Yahoo has revealed full details of the failed bid for all of Yahoo. While Yahoo has publicly said that Microsoft would not back away from its $31 per share bid and at most put out an unofficial bid of $33 per share before promptly walking away from talks in May, the Journal now says that Yahoo had volunteered two weeks to be taken over at a cost between $33 and $34 per share but that Microsoft chief Steve Ballmer at this point refused, instead making the company's still standing offer of buying just Yahoo's search business.
Yahoo refused under its well-known stance that such a deal would gut its core business and privately saw Microsoft's determination to buy some or all of Yahoo as a reflection of Ballmer's personal obsession with thwarting Google at all costs, calling his offers a cure for "filling his Internet hole."
Microsoft and Ballmer specifically have argued since the initial late January bid for all of Yahoo that it was necessary to create a second major search outlet large enough to challenge Google's ad and search business, although critics have also charged that Microsoft is concerned about the potential success of Google's web apps at undermining Office.