Microsoft is reportedly bidding with a consortium of investors, led by Silver Lake, to take a minority stake in Yahoo.
The software giant previously signed an NDA last week to take a closer look at Yahoo’s finances. Microsoft is expected to provide billions of dollars in financing as part of the consortium to Yahoo. The deal would see Microsoft take a minority stake of up to 20% in Yahoo. Recent rumors from October suggested that the software giant was considering a partnership deal with Yahoo. The partnership deal was working into a full blown acquisition according to The Wall Street Journal, who reported in October that Microsoft was working with the Canada Pension Plan Investment Board and Silver Lake Partners, a private equity firm, to ready a bid to acquire Yahoo. Deal Book reports that Yahoo is still considering bids for the entire company.
Microsoft CEO Steve Ballmer recently revealed that Microsoft was “lucky” not to buy Yahoo back in 2008. “You know, times change, times change,” said Ballmer. “The market really kind of fell apart. Sometimes you’re lucky,” he added. Microsoft famously offered $44.6 billion cash-and-stock to purchase Yahoo in February, 2008. The deal was an intense one for both parties, valuing Yahoo’s stock price at $31, a significant premium on its true value at the time. Despite the offer, Yahoo declined and wanted more cash. Microsoft upped its offer to $33 a share but Yahoo believed the company was worth $37 per share.
The failed deal surfaced as a search deal between Bing and Yahoo. Microsoft secured a 10-year deal in July 2009 to push Bing as the exclusive algorithmic search and paid search platform for Yahoo! sites. The agreement ended Microsoft’s talks with Yahoo which had lasted nearly two years. Yahoo has failed to make an impact with its various web properties, despite acquiring popular photo sharing site Flickr. The once popular web portal and search engine has struggled against Google and Facebook in the new world of social networking.
Microsoft announced an online advertising deal with AOL and Yahoo to sell premium online display inventory earlier this month. The agreement will allow each network to offer each other’s premium non reserved online display inventory to advertising customers. Microsoft, Yahoo and AOL will all continue to operate their core networks and advertising separately but the partnership will benefit advertising customers wishing to buy up inventory across all the sites.