Software giant Microsoft is willing to stump up $1bn towards the estimated $10bn price tag for struggling internet portal Yahoo. Ironically, Microsoft nearly bought Yahoo eight years ago for $47bn, but Yahoo’s then-board fudged the deal.
It is understood Microsoft is willing to work with various private equity firms to acquire Yahoo as a means of maintaining its close business links with the company.
Yahoo was the darling of the fledgling internet industry in the 1990s but lost its footing and direction and soon became eclipsed by Google and then by the arrival of social media players like Facebook.
The company lurched on as social media consolidated and was nearly bought by Microsoft for $47bn. Microsoft abandoned the deal because of the Yahoo board’s indecisiveness and after a key advertising deal with Google fell through founder Jerry Yang stepped down as CEO, ushering in the arrival of Marissa Mayer.
Despite Mayer’s best efforts to turn around the Yahoo battleship, the company is now up for sale with a $10bn price tag. It is a curious situation as Mayer still wants to turn Yahoo around while the board is eager to sell up.
Proxy war looms at Yahoo
According to Kara Swisher in Re/code, activist shareholder Starboard Value is mounting a proxy challenge to Yahoo and wants to replace the board with its own slate of directors.
Microsoft is understood to have been meeting with private equity firms and has told them that it is potentially willing to invest up to $1bn to finance a takeover.
The emergence of Microsoft on the field lends some seriousness to the situation and shines a light at the end of the tunnel for one of the internet’s most venerable and original players.