Microsoft proposes to buy Yahoo search

Microsoft Corp has proposed to buy Yahoo Inc’s search business and take a minority stake in the Web pioneer, stopping short of a full-out merger, a person familiar with the discussions said on Monday.

As part of the deal, Yahoo would sell its Asian assets including significant minority stakes in Yahoo Japan and China’s Alibaba Group, while Microsoft would buy a chunk of what remains of the company, the source said.

The talks were revealed by the two companies on Sunday, but they declined to reveal the terms of the discussions. Earlier this month, Microsoft walked away from a proposal to acquire Yahoo for $47.5 billion, or $33 per share, after Yahoo rebuffed the offer, saying it would only settle for $37 a share.

The new deal, if completed, would forge an alliance between the two companies that would represent an alternative means of competing with rival Google Inc, whose ubiquitous search engine has made it an online advertising powerhouse.

- From Reuters