Microsoft is reportedly working on a fresh bid to acquire Yahoo.
Reports emerged earlier this month that the software giant was considering a partnership deal with Yahoo. The partnership deal may have advanced into full blown acquisition talks according to The Wall Street Journal. Microsoft is working with the Canada Pension Plan Investment Board and Silver Lake Partners, a private equity firm, to ready a bid to acquire Yahoo. The Wall Street Journal reports that “at least nine private equity firms” are studying a potential buyout. The deal would value Yahoo at around $16-18 per share.
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.
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. Yahoo has yet to appoint a new CEO. Yahoo cofounder Jerry Yang admitted on Wednesday that the company’s advertising search deal with Microsoft hasn’t worked out as well as they’d hoped. Speaking on stage at the AsiaD conference, Yang said “It takes trial and error. It takes work. I will probably venture that the Microsoft folks would say the partnership hasn’t gone the way they wanted.”