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Microsoft eyeing deal to buy Yahoo: reports
Yahoo! News ^ | 05/03/2007

Posted on 05/04/2007 9:08:36 AM PDT by Swordmaker

NEW YORK (Reuters) - Microsoft Corp. (Nasdaq:MSFT - news) has stepped up its pursuit of a deal to buy Yahoo Inc. (Nasdaq:YHOO - news), two newspapers reported on Friday, as the two companies re-enter talks to strike a deal and fend off a common competitor in Web search leader Google Inc. (Nasdaq:GOOG - news)

Yahoo shares jumped 17.96 percent to $33.24 in Nasdaq trading on Friday, while Microsoft shares fell 1.26 percent to $30.58.

The two companies have held informal talks over the years, but the latest approach comes as Microsoft seeks a deal to counter Google's rapid growth.

"It's been talked about for a long time, ever since Google came into the picture. I can't imagine a more perfect deal," said Peter Lobravico, vice president of risk arbitrage sales/trading at brokerage Wall Street Access.

"You can't find a stronger buyer than Microsoft and while it would spur a lot of political and regulatory noise, everyone knows in the end that the deal would go through."

Analysts often dismiss a takeover of Yahoo by Microsoft since the two companies have such different cultures and Microsoft usually prefers to buy small companies with interesting technology.

The New York Post reported early on Friday that Microsoft made an offer to buy Yahoo a few months ago, but Yahoo spurned the advances. The paper, putting a price tag of $50 billion on a Yahoo takeover, said that discussions continue between the two companies.

Microsoft and Yahoo declined to comment on the reports.

Investment bank Goldman Sachs is advising on the process, the paper said. The bank declined to comment. One banking source said that investment banks had been pitching Microsoft on the idea of buying Yahoo for months.

The Wall Street Journal followed with its own story, saying that the two companies are in early-stage talks about a merger or some kind of link-up.

The renewed talks are a sign of Google's power, the Journal said, and are also an indicator of problems with in-house efforts at Yahoo and Microsoft. A deal could help Microsoft attract advertisers to its online businesses.

"We've been a significant believer in a Yahoo-Microsoft combination (because) both Yahoo and Microsoft both need to create a bigger presence (in advertising) to compete with Google," said Marianne Wolk, an analyst with Susquehanna Financial Group.

Google agreed to buy DoubleClick Inc. last month for $3.1 billion, accelerating a push into the graphic ad market. Google beat out Microsoft and Yahoo to win the deal, sources said.

(Additional reporting by Paritosh Bansal, Jim Finkle, Daisuke Wakabayashi)

TOPICS: Business/Economy

1 posted on 05/04/2007 9:08:37 AM PDT by Swordmaker
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To: Swordmaker

And when Steve Jobs is behind bars, Microsoft will raid Apple’s developers!

2 posted on 05/04/2007 9:26:49 AM PDT by Incorrigible (If I lead, follow me; If I pause, push me; If I retreat, kill me.)
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To: Swordmaker

I sure hope not. MSN has “the” worst search engine around.

3 posted on 05/04/2007 9:57:30 AM PDT by Post-Neolithic (Money only makes Communists rich Communists)
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To: Post-Neolithic


4 posted on 05/04/2007 10:06:22 AM PDT by Incorrigible (If I lead, follow me; If I pause, push me; If I retreat, kill me.)
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To: Swordmaker

Microsoft and Yahoo is a match made in hell. Neither can mind their own business.

When I get an error message the computer asks me if I want to tell Microsoft about it. I wish there were an option that says No, I dont want to tell Microsoft anything. Ever.

5 posted on 05/04/2007 10:43:14 AM PDT by freespirited
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To: freespirited

Great... What search engine do I use now? I won’t use google because of their liberal bias and now if Yahoo becomes MS I won’t use them either as I don’t want to support the evil empire.

I suppose I just have to stop using the internet all together.

6 posted on 05/04/2007 10:52:54 AM PDT by CarmichaelPatriot
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To: TPluth

Some other search engines to try:

Hope one does the trick.

7 posted on 05/04/2007 10:12:50 PM PDT by freespirited
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