Google looks at bid for troubled rival Yahoo

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Google has piled into the potential auction of rival Yahoo, allying with private equity players to explore a joint bid for the ailing internet giant.

Google's move comes after Microsoft also began examining the possibility of a takeover of Yahoo, in combination with other private equity bidders. Yahoo is exploring its options in the wake of disappointing results, strategic confusion and the firing last month of its chief executive, Carol Bartz.

Both Google and Microsoft are major rivals in the business of selling adverts on the internet, and each believes there could be benefits from combining their own business with Yahoo's network of websites, email services and advertising partnerships. Google in particular is trying to expand its business selling display advertising – the banner adverts and short commercial videos that appear alongside web content – while Microsoft is trying to protect its existing search engine partnership with Yahoo.

The participation of either company in a bid for Yahoo is likely to attract the internet of competition authorities in the US and abroad, analysts said, and it is possible no bid for Yahoo will ultimately be forthcoming.

The strategic review process, though, could provide Yahoo's rivals with a rare chane to pore over its books. Yahoo shares have soared 25 per cent since Ms Bartz's ouster, on shareholder hopes that company will sell itself or break itself up.

Private equity firms which have been linked with a potential deal include Silver Lake Partners. Peter Chernin, the former chief operating officer at Rupert Murdoch's News Corp, is believed to be considering fronting a bid, while Jack Ma, founder of Alibaba, the Chinese web firm which is part-owned by Yahoo, has also expressed interest.