Microsoft eyeing up Yahoo: reports

04-05-2007

by Maxim Kelly

In one of its periodic spasms, the online media is going into speculation meltdown over rumours of a Yahoo-Microsoft merger.

The impetus to rumoured talks between the two technology leviathans is Google's recent acquisition of online advertising heavyweight DoubleClick. This is not the first time the two firms have had talks about hooking up, last year Yahoo rejected a Microsoft bid to buy a stake in its search business.

According to the New York Post and The Wall Street Journal, executives from Yahoo and Microsoft appear to be in early-stage discussions regarding a new relationship.

Based on the amount of industry speculation on Friday afternoon, there is no doubt a pebble-sized grain of truth in this, and Microsoft's global army of press spokespeople were being sent "talking points" to deal with journalists' enquiries on the story.

"Microsoft is saying it doesn't comment on rumour or speculation," a spokesman told ENN, and there seems to be no sense of denial coming from Redmond at this stage.

Yahoo could not be reached for comment.

The markets have added grist to the rumour mill at time of writing with Yahoo stocks trading at USD33.29, up 18 percent, while Microsoft shares were down 1 percent at USD30.66.

The New York Post cited an unnamed banker as its source for info on a deal reportedly advised on by Goldman Sachs.

If reports are accurate, a Microsoft-Yahoo alliance would make sense, as both firms have complimentary strengths in software and online search/advertising respectively.

US industry commentators have estimated Yahoo's value to be USD50 billion -- no small change for Microsoft.

If the speculation is untrue then the markets are experiencing some sabre rattling rumour mongering from two of Google's major competitors.

Speaking with ENN, a Google spokesman said the company never commented on market speculation, "especially as Yahoo aren't too."