Yahoo board member Icahn wants Microsoft deal

Activist investor Carl Icahn spoke out in favor of a search deal between Yahoo Inc and Microsoft Corp, as talks between the two companies appeared to regain momentum.

Icahn declined to comment on the state of any negotiations between Yahoo and Microsoft. He had tried to broker a partnership between the two companies last year, when talks on Microsoft's $47.5 billion (£28.7 billion) takeover bid for Yahoo fell apart.



"I've been a strong advocate of getting a search deal done with Microsoft," Icahn, who owns about 5 percent of Yahoo and is a director on its board, told Reuters on Friday.



"It would enhance value if a deal got done, because of the synergies involved," he said in a phone interview.



Microsoft and Yahoo are close to a long-discussed search and online advertising deal, which could be announced in the next week, according to another source familiar with the matter who is not associated with Icahn.



The news was first reported by the AllThingsDigital blog, which said a deal would involve Microsoft paying Yahoo several billion dollars upfront to take over its search advertising business and guarantee certain payments back to Yahoo.



The two companies have talked about cooperating for months, after Microsoft's bid to buy Yahoo was rebuffed last year and Yahoo's attempt to seal a search advertising deal with Google Inc fell apart under regulatory scrutiny.



Yahoo Chief Executive Carol Bartz said in May that any deal to spin off or combine its search assets will require a partner with "boatloads of money." She said at the time that Yahoo was talking "a little bit" with Microsoft, but gave no details.



Bartz is currently out of the office for two weeks, following knee replacement surgery, according to an email that she sent to her employees earlier this month.



Icahn, whose firm had a 5.4 percent stake in Yahoo as of March 31, said he remains a "strong supporter" of Bartz, who took the reins in January from Yahoo co-founder Jerry Yang.



Bartz has made a number of changes since joining Yahoo, including shutting down underperforming websites and laying off 5 percent of the Sunnyvale, California company's staff.



But many investors continue to see a deal with Microsoft as Yahoo's best option, saying it will cut costs and create an online entity big enough to better compete with Google, the top search company in the United States.



The latest discussions involve a partnership in which Microsoft would handle search capabilities for Yahoo, while Yahoo could potentially handle online advertising for the two online sites.



According to Kara Swisher, co-executive editor of AllThingsDigital, a group of high-powered Microsoft online executives flew to Silicon Valley on Thursday to iron out remaining issues related to technology deployment. They included Senior Vice President of Online Audience Business Group Yusuf Mehdi, search head Satya Nadella, top digital executive Qi Lu.



Representatives for Microsoft and Yahoo declined to comment. Yahoo is scheduled to report quarterly results next Tuesday, and Microsoft on Thursday.



Microsoft withdrew its $47.5 billion offer to buy Yahoo in May 2008 after Yahoo's board said the price was too low. The software giant then offered to buy Yahoo's search advertising assets for $1 billion (£605 million) upfront, and guarantee $2.3 billion (£1.3 billion) in annual revenue for five years, in a proposal backed by Icahn.



Google is the dominant player in the search market, with a 65 percent market share in June, according to comScore. Yahoo was second with 19.6 percent, while Microsoft was third with 8.4 percent. While Microsoft's share remains small, its new search engine Bing has won positive early reviews.



On Nasdaq, Yahoo finished Friday's regular trading session up 4 percent at $16.84 (£10.19) while Microsoft closed 0.6 percent lower at $24.29 (£14.70).

Arts and Entertainment
TVShow's twee, safe facade smashed by ice cream melting scandal
News
newsVideo for No campaign was meant to get women voting
News
A photo of Charles Belk being detained by police on Friday 22 August
news
News
news
PROMOTED VIDEO
Life and Style
ebooksA superb mix of recipes serving up the freshest of local produce in a delicious range of styles
Life and Style
ebooksFrom the lifespan of a slug to the distance to the Sun: answers to 500 questions from readers
Sport
Alexis Sanchez celebrates after scoring his first goal for Arsenal in the Champions League qualifier against Besiktas
sportChilean's first goal for the club secures place in draw for Champions League group stages
Arts and Entertainment
Amis: 'The racial situation in the US is as bad as it’s been since the Civil War'
booksAuthor says he might come back across Atlantic after all
Extras
indybest
Life and Style
Google Doodle celebrates the 200th birthday of Irish writer Sheridan Le Fanu
tech
Arts and Entertainment
Vinyl demand: a factory making the old-style discs
musicManufacturers are struggling to keep up with the resurgence in vinyl
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    Energy Project Engineer - Cambridge

    excellent benefits package including company car: The Green Recruitment Compan...

    Business Development Manager (Electricity and Gas)

    £50000 Per Annum excellent benefits package including company car: The Green R...

    Systems Administrator - Buckinghamshire - £35,000

    £30000 - £35000 per annum + bonus + benefits: Ashdown Group: The Ashdown Group...

    Front-End Developer (JavaScript, HTML5, CSS3, C#, GUI)

    £55000 - £70000 per annum + Benefits + Bonus: Harrington Starr: Front-End Deve...

    Day In a Page

    Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

    Robert Fisk: No victory for Israel despite weeks of devastation

    Palestinians have won: they are still in Gaza, and Hamas is still there
    Mary Beard writes character reference for Twitter troll who called her a 'slut'

    Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

    The Cambridge University classicist even wrote the student a character reference
    America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

    America’s new apartheid

    Prosperous white districts are choosing to break away from black cities and go it alone
    Amazon is buying Twitch for £600m - but why do people want to watch others playing Xbox?

    What is the appeal of Twitch?

    Amazon is buying the video-game-themed online streaming site for £600m - but why do people want to watch others playing Xbox?
    Tip-tapping typewriters, ripe pongs and slides in the office: Bosses are inventing surprising ways of making us work harder

    How bosses are making us work harder

    As it is revealed that one newspaper office pumps out the sound of typewriters to increase productivity, Gillian Orr explores the other devices designed to motivate staff
    Manufacturers are struggling to keep up with the resurgence in vinyl records

    Hard pressed: Resurgence in vinyl records

    As the resurgence in vinyl records continues, manufacturers and their outdated machinery are struggling to keep up with the demand
    Tony Jordan: 'I turned down the chance to research Charles Dickens for a TV series nine times ... then I found a kindred spirit'

    A tale of two writers

    Offered the chance to research Charles Dickens for a TV series, Tony Jordan turned it down. Nine times. The man behind EastEnders and Life on Mars didn’t feel right for the job. Finally, he gave in - and found an unexpected kindred spirit
    Could a later start to the school day be the most useful educational reform of all?

    Should pupils get a lie in?

    Doctors want a later start to the school day so that pupils can sleep later. Not because teenagers are lazy, explains Simon Usborne - it's all down to their circadian rhythms
    Prepare for Jewish jokes – as Jewish comedians get their own festival

    Prepare for Jewish jokes...

    ... as Jewish comedians get their own festival
    SJ Watson: 'I still can't quite believe that Before I Go to Sleep started in my head'

    A dream come true for SJ Watson

    Watson was working part time in the NHS when his debut novel, Before I Go to Sleep, became a bestseller. Now it's a Hollywood movie, too. Here he recalls the whirlwind journey from children’s ward to A-list film set
    10 best cycling bags for commuters

    10 best cycling bags for commuters

    Gear up for next week’s National Cycle to Work day with one of these practical backpacks and messenger bags
    Paul Scholes: Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United

    Paul Scholes column

    Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United
    Kate Bush, Hammersmith Apollo music review: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it

    Kate Bush shows a voice untroubled by time

    A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
    Robot sheepdog technology could be used to save people from burning buildings

    The science of herding is cracked

    Mathematical model would allow robots to be programmed to control crowds and save people from burning buildings
    Tyrant: Is the world ready for a Middle Eastern 'Dallas'?

    This tyrant doesn’t rule

    It’s billed as a Middle Eastern ‘Dallas’, so why does Fox’s new drama have a white British star?