Yahoo jumps on talk of Microsoft buying deal worth $50 billion
Yahoo jumps on talk of Microsoft buying deal worth $50 billion
(NewDesignWorld Press Release Centre) NEW YORK - Yahoo shares have risen 20 percent after reports pointed to discussions about a possible combination. The Wall Street Journal tells of what appear to be early-stage discussions. It says executives at Microsoft and Yahoo are taking a fresh look at a possible merger of the two companies or some other kind of potential tie-up.
The discussions were first reported in today's New York Post.
The New York Post says Microsoft has asked Yahoo to take part in formal negotiations for a possible deal.
Microsoft is facing tough competition from Yahoo and Google in the Internet search business.
Source: Yahoo
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This could be Microsoft's first step to beat Google
Shares in Yahoo have risen by as much as 14% upon media reports suggesting the internet firm had been approached by Microsoft about a potential tie-up.
US reports suggested Microsoft was keen to pair up with Yahoo in a deal which could be worth up to $50bn (£25bn).
Persistent talk of a possible deal has surrounded the two firms in recent years, with reports claiming the duo held informal merger talks last year.
Neither would comment, calling the new reports "rumours and speculation".
Yahoo shares closed trading up 9.9% at $30.98 after reports of a possible tie-up with Yahoo in the Wall Street Journal and the New York Post.
But Microsoft's shares fell by more than 1% on the news.
'Incompatible'
One analyst said a takeover of Yahoo was unlikely given the huge sums required but some form of co-operation in areas such as advertising was more conceivable.
I do not understand what Yahoo would get out of the deal
Matt Rosoff, Directions on Microsoft
"I don't think it is going to happen," said Matt Rosoff, from IT research firm Directions of Microsoft, of a possible takeover.
The two firms' cultures were incompatible, Mr Rosoff added.
"I do not understand what Yahoo would get out of the deal, including that there are people there who don't want to work for Microsoft."
Microsoft and Yahoo currently trail Google in the multi-billion dollar web search market.
Bill Gates knows Microsoft is trailing Google in a key market
Google's recent $3.1bn acquisition of web advertising firm DoubleClick has increased the onus on Microsoft to improve its position in the online search market.
Yahoo has disappointed analysts with its performance in recent times, its profits falling 11% in the most recent quarterly period.
Yahoo recently installed a new software system it hopes will secure higher advertising sales, but it says the gain will not come until its second quarter.
Source: BBC