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Microsoft, Yahoo Consider Tie-Up TMCnet Contributing Editor In what could be one of the most significant deals of this generation, global software giant Microsoft (News - Alert) Corp is mulling a $50-billion dollar bid for Internet giant Yahoo! Inc., according to a number of online and print media reports Friday.
The New York Post was one of the first media outlets to report that Microsoft and Yahoo were in talks to possibly merge, and before long reports surfaced on a number of media web sites. The reports caused Yahoo’s shares to rise 16% on Nasdaq Friday, while Microsoft’s stock dipped slightly.
With Yahoo CEO Terry Semel slated to speak at a Microsoft online advertising conference in Redmond next week, it may be more than coincidental.
Microsoft is feeling increasing pressure to compete with Google (News - Alert), which plans to beef up its portfolio with its recent acquisition of online advertising company DoubleClick Inc. for $3.1 billion.
In addition, Google is developing Web-based software that directly competes with Microsoft Office. This competition is in fact driving Microsoft to run behind Yahoo!
The renewed talks come amid growing threat by search engine and online advertising giant Google Inc for both the companies. In fact, Google replaced Microsoft as the world's top brand only last month.
According to the Post and Wall Street Journal, Microsoft, which has a market cap of close to 300 billion dollars, has intensified its pursuit for Yahoo! after years of informal talks. Microsoft CEO Steve Ballmer stated earlier this week said that his company's biggest regret was not getting into online advertising.
The Post reportedly stated Microsoft made overtures to acquire Yahoo a few months ago, which Yahoo apparently spurned. Microsoft is now seeking to re-enter formal negotiations, the report said.
If consummated, the deal which have far-ranging effects on a global scale., including in India, where Microsoft and Yahoo both carry huge brand value and enjoy significant exposure. Sources say the latest approach signals urgency on Microsoft's part that has up until now been lacking. The expanding number of Internet and mobile users in the country is attracting both companies, who are eyeing businesses in this market to spark future growth.
Microsoft employs 5,000 in India, while Yahoo's Bangalore development centre has reached 1,000. Pradip Bhatacharya is a contributing writer for TMCnet.
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