Microsoft Says It Proposed Collaborating With Yahoo
Microsoft Corp., the software maker that withdrew its $47.5 billion offer to buy Yahoo! Inc., proposed an alternative transaction with the Internet company to expand its online services and advertising businesses.
Microsoft is considering an alternative agreement that wouldn’t involve acquiring the whole of Yahoo, according to a statement from Microsoft today. Microsoft said it reserves the right to reconsider a bid to acquire Sunnyvale, California-based Yahoo.
Microsoft spent three months wooing Yahoo, owner of the second-most popular search engine, to compete with Google Inc. in Internet searches and online advertising. Ad sales reached $41 billion worldwide last year, according to Piper Jaffray & Co. Microsoft projected that may almost double by 2010.
Last week, Yahoo came under pressure from billionaire investor Carl Icahn to revive negotiations with Microsoft, which walked away from its offer May 3.
Icahn, who has threatened a proxy battle and has the backing of Yahoo shareholder Paulson & Co., said the combination would create “a force strong enough” to fight off market leader Google.
Icahn disclosed that he owned 10 million Yahoo shares and options to buy 49 million more. He submitted his own slate of nominees for Yahoo’s board, including himself, Dallas Mavericks owner Mark Cuban and former Viacom Inc. CEO Frank Biondi. All 10 of Yahoo’s current directors are up for re-election at the annual meeting on July 3.
- From Bloomberg