Microsoft reportedly considering a bid to partner with Yahoo

By Tom Warren, on 5th Oct 11 7:07 pm with 36 Comments

Former Yahoo CEO Carol Bartz and Microsoft CEO Steve Ballmer

Microsoft is considering bidding for a partnership with Yahoo, according to reports.

A fresh attempt by Microsoft for Yahoo and its various web properties is on the cards according to the Reuters news agency. Microsoft is reportedly seeking to partner with Yahoo but it’s not clear whether the software company will opt for a bid considering the unsuccessful plan to acquire Yahoo in 2008. The software giant 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. Yahoo’s board of directors eventually went public with a reply to Microsoft’s offers, stating “we have continued to make clear that we are not opposed to a transaction with Microsoft if it is in the best interests of our stockholders. Our position is simply that any transaction must be at a value that fully reflects the value of Yahoo!, including any strategic benefits to Microsoft, and on terms that provide certainty to our stockholders.”

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. A Yahoo sale in 2011 could open the doors to a number of new options for the company.

Yahoo’s board fired CEO Carol Bartz in early September over the phone after nearly three years in charge of the struggling internet services company. A fresh Microsoft bid would see the company face off against a range of other companies according to Reuters. Yahoo’s market value is around $18 billion and companies like Providence Equity Partners, Hellman & Friedman and Silver Lake Partners, as well as Chinese e-commerce giant Alibaba and Russian technology investment firm DST Global, are reportedly considering bidding for Yahoo.

Microsoft declined to comment on Reuters report.

Thanks to WinRumors reader Nick for the news tip

  • Anonymous

    hmm..  this could be a way to pull out the costs of yahoo against bing directly (expensive search deal) and apply it as a full on acquisition..

    either way, its sort of dangerous..  A bidding war could be deadly and DoJ scrutiny would slow the deal down to high hell

  • oolong2

    OK….  getting a little tired of Yahoo and MS. 

    Yahoo just needs to get absorbed by MS and be DONE with it already.

  • Johnwr29938

    Wait, why would MS even want to partner with Yahoo… the article itself says that yahoo is getting less relevant these days.

    • Bburke33609

      They funnel a ton of traffic to Bing. If they were to just dry up and blow away, where would the people who use yahoo for whatever reason they use it go? Probably to Google, I’d imagine. If I was MS I would give them enough cash to keep above water and maybe guide them to some kind of useful purpose. Hell, even AOL is still around and doing something of value to people.

  • Tuxplorer

    NO!!!! Don’t do this Microsoft. This will be a MASSIVE mistake. Yahoo is dead and buried. NOBODY cares about Yahoo anymore. If they want to buy a company, it should be Nokia.

    • JJinge

      No, they shouldn’t buy Nokia, for the same reason Google shouldn’t have bought Moto, and for the other reason that MS does not do hardware ;)

      Other thing, they can be partners, without buy it. It would be better for both. Yahoo and MS are two distinct brand.

    • Anonymous

      I agree with you on Yahoo, but buying Nokia would be a mistake.  Nokia is already committed to Windows Phone so buying them would be an unnecessary gamble.

    • Joe

      Not only an unnecessary gamble, but have you seen how manufacturers are reacting to Google’s purchase of Motorola? I think Microsoft has, and knows that an outright purchase of Nokia would be a huge mistake.

    • Major Plonquer

      Even worse buying Nokia would put Microsoft in competition with its own customers.  The same mistake that Google made.

    • Guest

      They still have a larger share of the search market than MS does. So apparently somebody cares.

    • Joe

      All of Yahoo search is provided by Bing, meaning every search done on Yahoo is a Bing search…. So explain how Yahoo has a larger share of the search market?

    • Ads

      yup Yahoo search is provided by Bing, however most of ads revenue goes to Yahoo! if I’m not mistaken, Microsoft gets trivial 5%

  • Grannyville7989

    De ja vu.

  • Avatar Roku

    Well they’ll certainly get them for much cheaper than they would have a few years ago. Yahoo is still the 4th most visited website and the 2nd biggest search destination on the web. It would be funny if Microsoft just redirected yahoo traffic to It doesn’t seem like AOL, Yahoo, and MSN are really able to make the webportal business model work though. Facebook has supposedly hurt all of these sites.

    The sites all get a lot of traffic but they don’t make money. Yahoo would be an incredibly redundant purchase for Microsoft, so it would mainly be about eliminating competition and absorbing the bigger web portal/search destination. With MSN and Yahoo domains Microsoft would have an incredibly broad reach for their content and ads, but they would have to cut jobs like mad to make it profitable.

    Microsoft would have to get a very good price and an aggressive plan to make this work, but their interest still makes sense. Yahoo is still a big destination portal despite their inability to profit from it.

  • Anonymous

    Nice couple… Lol just joking..

  • Jinge

    Nothing to do with the article, but I have just tried the WP7 Winrumors app. It looks nice. 
    Maybe it should preload the next news because it takes time to load when you read something and hit “next”.
    2. The icon is WHITE, it is not nice… Background color of the theme would be much better ;)
    3. The app has only a white theme? A dark one would be nice :p I am getting used to the black background, and suddenly white… ouch!
    4. The app looks slow, it is not smoothy… But I guess you cannot optimize it?

    Anyway, happy to have it on my phone :) Thanks!

    • luke516

      Omg! Winrumors has a wp7 app!
      I’ll go check it out ;)

      EDIT: its not official. And it sucks.

  • Anonymous

    Yahoo? No Microsoft! No! It’s a bad idea. Really bad.

  • Anonymous

    I just don’t think it is a good idea.

  • Anonymous


    With the Yahoo-Bing deal already done ..why-t-f does Microsoft need Yahoo any more !??!?!?!?!

    • Guest

      For the reason they did the deal: to get Yahoo’s search volume. Yahoo is also the lead on selling the partnership’s advertising.

  • Anonymous

    The WSJ is saying the potential deal involves MS, Yahoo!, and AOL sharing advertising across their sites. So I don’t think MS is making any moves to acquire Yahoo!, nor can I see MS’s board supporting such a move, not when Yahoo! is decaying so rapidly and is probably way overvalued at the moment.

    A newly announced digital advertising alliance between the 3 is probably more likely.

  • Steve Ballmer

    I’ve got four words for you:

    • Guest

      Which one?

    • Guest

      I’ve got three for you:

      Get. A. Life.

    • Guest

      he is Steve ballmer, he has a life :P

    • Guest

      Oh look, it’s the other troll alias.

    • Major Plonquer

      I have two words for you.  But I’d get banned if I mentioned them.

  • Anonymous

    Is that the ousted Yahoo! CEO in that picture?  Trying to rub salt in her wounds Tom?

  • Starcade

    I like Yahoo, and use their finance section daily in addition to a couple of other features.  I don’t mind if Microsoft aquires or partners with Yahoo, just as long as they don’t pay a premium to do so.  They should offer a lot less than they did in the past.  Yahoo is not as great as it once was, but it’s still heavily used and has a lot of content and content partnerships.  Their most recent partnership was with ABC News.

  • Guest

    After another losing year for the stock and the shareholder meeting coming up in November, I doubt Ballmer is any position to mount another Yahoo bid.

  • Guest

    I imagine that MS is monitoring the situation and seeing what other potential partners think. If it looks like Yahoo could fall in hostile hands then they might act, either alone or in concert with others. Otherwise, they’ll probably let it get sold, the asian parts pieced out, and continue the same deal that exists today with the new owner of the Yahoo portal/search side.

  • Anonymous

    would rather see a Netflix “deal” instead of Yahoo.

  • Dotlex

    iPhone 4s: “iPhone For Steve”
    1955 – 2011

    • Llort Etaerg

      1 day after iPhone 4S was announced… really sad. Maybe he watched the keynotes?

  • Chris Ferreira

    Ugh…Sometimes I really question Ballmer’s decisions