Yahoo weighs options as Microsoft drama continues

News Corp. said to be hatching a plan with Microsoft to sweeten the deal for Yahoo.

Yahoo is weighing its options to accept a buyout by Microsoft or consider tie-ups with other companies, in particular a reported plan to join forces with AOL, as a way to stave off the software giant's advances.

The possibilities for the ending to the story that begin on Feb. 1, when Microsoft made its US$44.6 billion offer for Yahoo, have become dizzying, with rumors cropping up almost daily in the past week about what the ultimate outcome might be. The Wall Street Journal reported Friday that Yahoo's board was meeting to discuss the company's options, which to many seem limited to one: accepting Microsoft's current offer.

In between the rumors and speculation, Yahoo has been making some of its own moves to avoid being subsumed by Microsoft. On Wednesday the Internet company said it is testing Google's AdSense for Search service, acting as one of the Web publishers that carry pay-per-click text ads from Google. The move opens up the possibility that eventually Yahoo may outsource its paid-search business to Google, which might provide a way out of having to make a deal with Microsoft.

Predictably, Microsoft was none too happy about the news and spared no time pointing out all the ways that kind of union could run into regulatory problems, because it would give Google and Yahoo 90 percent of the search-advertising market.

By Thursday, Rupert Murdoch's media empire News Corp. was said to be hatching a plan with Microsoft to sweeten the deal for Yahoo. News Corp. recently had been considered a possible spoiler to Microsoft's plan, but CEO Murdoch shot down those rumors in March. A deal to go in with Microsoft to buy Yahoo would at least give his company a piece of the action.

On the same day, the rumor that Yahoo and AOL may join forces was dusted off and surfaced again in the public domain. Rumors that Yahoo and AOL might merge have been swirling since 2006, and one financial analyst on Friday even said it might be the only way Yahoo can avoid Microsoft's buyout. Sanford C. Bernstein's Charles Di Bona surmised in a research note that a Yahoo-AOL deal could give investors more money than the Microsoft deal if AOL's parent company, Time Warner, were to contribute some cash to it.

No matter what happens when the dust settles and rumors become reality -- or not -- one thing is quite likely: combining the infrastructure for the Internet businesses of Yahoo and Microsoft, or Yahoo and AOL, or Yahoo and Microsoft and News Corp., is going to be a logistical headache. And even once a deal is made, it will be years before anyone reaps a reward from what could turn out to be an unwieldy mega-merger.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Elizabeth Montalbano

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?