Microsoft meets private equity firms over Yahoo buyout

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By Larry Banks

Microsoft execs are said to be in early talks with potential Yahoo investors about contributing finances to buy the troubled Internet search giant, according to a person familiar with the situation.

The talks are however said to be in the preliminary stages, and Microsoft is apparently focusing on preserving the relationship between the two companies, which mainly involves search and advertising agreements.

Private equity firms interested in the search company approached Microsoft, the source claims, although Microsoft has thus far declined to comment.

Yahoo is in the process of auctioning off its core Internet business including search, mail and news sites. The once dominant Internet company has struggled for years against Google and Facebook in the battle for online advertising.

Mobile operator Verizon’s Chief Financial Officer Fran Shammo said in December last year that the US firm might consider buying Yahoo’s core business, if it was a good fit.

Meanwhile, hedge fund Starboard Value LP on Thursday attempted to overthrow the entire board of Yahoo including Chief Executive Marissa Mayer, who has tried unsuccessfully to turn the company around whilst at the helm during the past four years.

Microsoft’s interest in Yahoo comes almost ten years after their last approach – in 2008 CEO at the time Steve Ballmer tried unsuccessfully to buy the firm for $45 billion. Microsoft investors may in hindsight be glad that the takeover failed.

SOURCE: Reuters.

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