Microsoft ‘very close’ to buying Yahoo!’s search business

17 Jul 2009

Microsoft is believed to be in the final stages of negotiations around finally buying Yahoo!’s search business, in a move that will give its search foray with Bing a little added zing!

Reports in various business tech blogs, including the influential All Things Digital, claim that negotiations are ‘down to the short strokes’.

Writing in her Boom Town blog, veteran tech journalist Kara Swisher reported that top executives at Microsoft, including its senior VP of the Online Audience Business Group Yusuf Mehdi, search head Satya Nadella and top digital exec Qi Lu, flew to Silicon Valley from their Microsoft’s Seattle base to iron out the remaining issues.

These remaining issues seem to pivot on the correct deployment of technology.

Last year, Microsoft abandoned its US$44.6bn total takeover plans for Yahoo! after previous CEO Jerry Yang and the then board bungled the deal.

In the aftermath, Microsoft CEO Steve Ballmer raged: “We won’t pay a dime for Yahoo!” Yahoo! shareholders were outraged and legendary corporate raider Carl Icahn led a revolt that saw new members added to the board and the subsequent departure of Yang.

It is unclear what the terms of the deal to acquire Yahoo!’s search business will be, but according to the 24/7 Wall Street blog Microsoft may shell out US$3bn to buy the search advertising business.

The question remains as to whether Microsoft’s acquisition of Yahoo!’s search business will give the Seattle software giant the zing it needs to take on Google, which this morning reported profits of US$1.48bn on revenues of US$5.5bn.

By John Kennedy