updated 11:00 pm EDT, Wed May 28, 2008
MS-Yahoo merger dead
Quashing circulating rumors, Yahoo's CEO said that while there is still interest between the online portal and software giant Microsoft to form some sort of partnership, Microsoft is no longer interested in a full merger. According to Reuters, Yahoo Chief Executive Jerry Yang claims that Microsoft walked away from a deal with "tremendous amount of power," after it upped the ante on Microsoft's $47.5 billion buyout offer. Yahoo President Susan Decker said issues such as regulatory approval had not been discussed, because pricing had held up all other discussions, Yang's public comments signaled that the companies remain open to a potential deal, but indicated that Microsoft had ruled out a merger for now, contradicting a BusinessWeek report from Thursday morning that claimed the companies were working on a buyout of all of Yahoo assets, rather than the just search portion of the business.
After the first buyout/merger merger proposal seemed to be dead in the water, the two companies returned to the negotiating table in mid-May on a partial buyout and/or partnership, but a search advertising deal with Google may have been a stumbling block.
"We did not walk away from that proposal. Microsoft did," Reuters quotes Yang as saying in an on-stage interview at the D: All Things Digital conference. "Microsoft is no longer interested in buying the company, and we are talking about other things. We definitely have to understand what they're proposing."
Yang admitted continuing interest by Microsoft, but didn't give any specific details and that a Yahoo deal "makes a lot of sense." In what appears to another effort to strengthen Yahoo's position, Yang added the market has not appreciated the potential of a Yahoo-Google partnership.