Microsoft resumes talks with Yahoo!

Microsoft said yesterday that it has resumed talks with Yahoo! on some kind of cooperation, about two weeks after it withdrew an unsolicited offer to take over the Internet company.

In a short statement, Microsoft said it was not proposing to make a new bid to buy Yahoo! "but reserves the right to reconsider that alternative" depending on discussions with Yahoo!, shareholders of Yahoo! or Microsoft, or other third parties.

"There of course can be no assurance that any transaction will result from these discussions," the statement said.

The contact came at a time when Yahoo! was facing a proxy battle by its investor Carl Icahn, who has been unsatisfied with Yahoo!'s refusal of the take-over offer from Microsoft which was worth US$47.5 billion.

Icahn launched a campaign Thursday to replace Yahoo!'s board with directors who are in favor of reopening talks with Microsoft, saying Yahoo! had acted irrationally in refusing the Microsoft bid.

Reports said this time that Microsoft was proposing an arrangement focused only on Yahoo!'s lucrative search advertising business instead of a full acquisition.

Microsoft's last effort to buy Yahoo! was seen widely as one of its attempts to challenge Google's dominance of the rapidly growing online search and advertising markets.

The software giant was hoping to acquire Yahoo! to compete more directly with Google in the internet-related markets. Yahoo! is currently ranked second in the internet search advertising business, behind Google, with Microsoft a distant third.

Google has been gaining ground in recent years on industry pioneer Yahoo!, which is also under pressure from the increasing popularity of social networking websites like Myspace and facebook.

Posted By: IndoSourceCode

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