Microsoft back in talks with a view to acquiring Yahoo!

23 Nov 2011

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Microsoft is understood to have signed a non-disclosure agreement with Yahoo! that could pave the way for the software giant to re-open talks about buying the internet company.

Microsoft tried to acquire Yahoo! in 2008 but the deal fell through. It had initially offered a 62pc premium – offering US$44.6bn – but boardroom shilly-shallying at Yahoo! allowed Microsoft to run out of patience and withdraw from the deal, with evident relief.

But three years later and it seems Microsoft is interested again.

Microsoft and Yahoo! have a search advertising partnership in place that is beneficial for Microsoft’s Bing search engine.

It is understood that other firms vying to buy Yahoo! include venture capital firms Silver Lake and TPG Capital who, by signing the NDA, will be able to examine Yahoo!’s books.

One of the main topics of discussion will be Yahoo!’s 40pc stake in Chinese internet giant, Alibaba Group, which is believed to be worth US$35bn and may be considering mounting its own bid for Yahoo!

Yahoo! shares were up 1pc to US$15.09 on the news, valuing it at around US$19bn.

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Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com