Microsoft Looking for Partners for Yahoo Buyout

by , 9:50 AM EDT, July 2nd, 2008

Apparently Microsoft isn't ready to throw in the towel yet and is now looking for partners to team up with for another attempt at a Yahoo! buyout. The Redmond-based company has been in talks with Time Warner and News Corp. along with other companies in hopes of striking a deal that would ultimately lead to Yahoo!'s breakup, according to the Wall Street Journal.

The deal Microsoft is proposing would let it snatch up Yahoo!'s search business leaving its partners to carve up what ever is left over.

While a deal like this would be a winning situation for Microsoft since it could walk away with exactly what it wants without having to break the bank, it may not ever come together. According to parties familiar with the plan, talks are still in a preliminary stage and won't likely lead to a deal with Yahoo!.

Microsoft had scheduled a meeting with Yahoo! to discuss the possibility of a group buyout but cancelled, leading the search company's executives to assume that its suitor couldn't find any partners.

Microsoft originally presented Yahoo! with an unsolicited buyout offer at the beginning of the year, but Yahoo! claimed Microsoft wasn't offering enough and rejected the offer. Later negotiations eventually fell apart and Microsoft withdrew its bid.

Yahoo! has since partnered with Google for a search advertising revenue deal that could help boost Yahoo!'s bottom line and also potentially creates an obstacle in Microsoft's renewed interest in a buyout.

Microsoft had been hoping to acquire Yahoo! to bolster its own lagging Internet search revenue business. The Windows Vista maker has been unable to catch up with Google in the lucrative search advertising market and was hoping to narrow the lead after snatching up Yahoo!. Considering the apparent lack of partner interest, however, Microsoft's latest scheme will likely fail, too.