updated 03:35 pm EDT, Thu June 12, 2008
Yahoo Ends MS Talks
Yahoo on Thursday afternoon revealed that talks between itself and Microsoft have come to an end, putting an abrupt halt to prospects of a renewed deal between the two companies. The early search engine pioneer says that "numerous" meetings were unsuccessful in negotiating a partial transaction and confirms that Microsoft was looking to acquire at least some of Yahoo's search business, a move which Yahoo now says would have been potentially fatal to its long-term health and hurtful to those contributing to the company.
The move "would leave the company without an independent search business that it views as critical to its strategic future," Yahoo says.
Yahoo also uses the announcement as an opportunity to downplay attempts by activist investor Carl Icahn to launch a takeover by proxy of Yahoo's board in an attempt to force a complete sale to Microsoft. The Windows developer at a June 8th meeting said "unequivocally" that it has no interest in a complete buyout of Yahoo even at its original bids of between $31 and $34 per share, Yahoo claims. Icahn has so far set a target of $34.75 per share for a deal.
While Icahn has yet to respond, the move immediately precedes what TechCrunch says is the rumored announcement by Yahoo of its long-proposed search ad deal with Google, which would see Yahoo let Google handle at least some of its search ad business.
The breakdown of talks between Microsoft and Yahoo effectively bars Microsoft from accelerating its efforts to compete with Google on the web, which primarily includes advertising and search but also involves web-based apps.