Microsoft rekindles its interest in Yahoo

Microsoft has raised the possibility that it may make a new bid for rival Yahoo, less than two weeks after walking away from $46bn (£23.5bn) takeover talks.

The software giant said last night that it had proposed a broad marketing alliance between the two companies and might make a new bid if the talks go well. The U-turn came just days after rebel Yahoo shareholders launched a coup to try to oust the board and get a new team in place to talk terms with Microsoft.

Yahoo, which repeatedly spurned Microsoft's takeover offers, had no immediate comment on the new proposal, which was revealed in a brief statement from Microsoft yesterday.

It said it was "considering and has raised with Yahoo an alternative that would involve a transaction with Yahoo but not an acquisition of all of Yahoo". Microsoft's chief executive, Steve Ballmer, has for several years been keen to merge Yahoo with his company's loss-making MSN internet business, to better compete with Google.

An alliance that combines key aspects of the two companies' online advertising businesses would be a second-best option, and one fraught with difficulty for two groups that have an intense rivalry. But Mr Ballmer is concerned that Yahoo may instead sign an alternative deal with Google, with whom it has been trialling a technological alliance.

Google dominates the online advertising market, serving up almost two-thirds of all the ads that appear alongside search results on its own and other websites.

"Microsoft is not proposing to make a new bid to acquire all of Yahoo at this time," the statement added, "but it reserves the right to reconsider that alternative depending on future developments."

Last week, the billionaire investor Carl Icahn launched a proxy battle aimed at unseating the 10-member Yahoo board at its annual shareholder meeting in July. He claimed the board had acted "irrationally" and "irresponsibly" in rejecting a Microsoft offer at $33 per share, when Yahoo stock had been trading at just $19 before the bid.

Shares in Yahoo closed at $27.66 last week.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition

Orthorexia nervosa

How becoming obsessed with healthy eating can lead to malnutrition
Lady Chatterley is not obscene, says TV director

Lady Chatterley’s Lover

Director Jed Mercurio on why DH Lawrence's novel 'is not an obscene story'
Farmers in tropical forests are training ants to kill off bigger pests

Set a pest to catch a pest

Farmers in tropical forests are training ants to kill off bigger pests
Mexico: A culture that celebrates darkness as an essential part of life

The dark side of Mexico

A culture that celebrates darkness as an essential part of life
Being sexually assaulted was not your fault, Chrissie Hynde. Don't tell other victims it was theirs

Being sexually assaulted was not your fault, Chrissie Hynde

Please don't tell other victims it was theirs
A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935
The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border