Microsoft-Yahoo Buyout Talks Back On? Not Yet.

Posted by: Rob Hof on June 24, 2008

Mike Arrington at TechCrunch is reporting that Microsoft is again talking with Yahoo about a full buyout, though Arrington admits his information is “thin.” One source I talked to, however, is adamant that there are no such talks on. That’s what CNBC is hearing, too.

CNET is reporting that the talks could be about a search deal, the first version of which Yahoo rejected before signing a deal on June 12 with Google instead. Maybe. Henry Blodget at Silicon Alley Insider thinks that’s more likely, though only on better terms, naturally. But it seems doubtful the prospects for the more limited search deal are what’s driving Yahoo’s stock price up by about 3% today, though that’s down from an initial spike of more than 10% on the rumor.

For now, at least, Yahoo’s position has clearly weakened, as investors have tanked the stock nearly to the $19-and-change where it sat before Microsoft’s unsolicited buyout offer on Feb. 1, and as a stream of managers and executives have left Yahoo in recent weeks after the last talks with Microsoft broke down. So I would not be surprised if Yahoo felt compelled to look at a new offer of some kind from Microsoft.

But I’m betting that if Microsoft is still interested in Yahoo at all—and that’s debatable, since it does seem that its ardor cooled considerably as the months of talks went by with no deal—it’s just as happy to watch Yahoo twist in the wind a bit longer before making another run.

Reader Comments

williambanzai7

June 26, 2008 12:34 PM

Before they go back to Microsoft they need to make a few adjustments. First, they need to rename the company YangHoo! Second, they need to convince all top line management that it is far better to leave to pursue "new exciting opportunities. They then need to appoint Carl IcahnBlog chief Strategy Officer. Finally, they need to remember to put a timer on all the lights...last one out please remember to power down the servers.

jamalystic

June 27, 2008 11:08 AM

One would have thought that the Google deal would have brought much needed relief for Yahoo but it seems the Yahoo saga just could not end. But it seems Yahoo needs asome psychiatrical therapy because it looks confused and deranged. Was the Google deal even call for? Yahoo Moves: Strategic Or Insane ( http://www.internetevolution.com/author.asp?section_id=466&doc_id=150767&F_src=flftwo)

MM

June 27, 2008 11:11 AM

MS is better off without Yahoo. Most of the good people are anyway going & Carl Icahn would succeed in sending off a lot more. It would be cheaper for MS to spend a 10th of the money to build the search business by themselves.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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