Numerous reports today are suggesting that Microsoft may become a big player in the sale of internet giant Yahoo, with Redmond reportedly interested in snapping up the company.
Executives representing Microsoft are said to have met with private equity firms about a potential purchase of Yahoo and the company is willing to pay a lot to get the company.
It will have to, for while Yahoo has said it is for sale, the company is very much playing hard to get and could cost as much as $10 billion for any buyer.
Despite saying it is open to bids, Yahoo’s coolness since the announcement has led to industry analysts thinking the company is willing to play a long game if need be. CEO Marissa Mayer (image) is known to be against selling the company and is still committed to her own strategies to turn the ailing dot.com giant around.
Microsoft’s interest seems to be as an investor as opposed to the company wanting to buyout Yahoo in its entirety. However, the company is apparently willing to stump up a substantial amount of cash to equity firms proposing bids for Yahoo, suggesting Microsoft’s interest is that of a major partner in any new ownership consortium.
It is perhaps telling that Microsoft has not yet made any commitments, clearly there is much to be sorted through, not least whether Yahoo is actually for sale. The board says yes, but the credibility of the board is under scrutiny and a growing consensus is that the sale is a “farce,” especially in the face of Mayer’s antipathy towards the idea.
So, it would be presumptive and too bold for Microsoft to declare any kind of lasting interest, but the company is certainly hovering according to numerous sources. At the moment discussions are nothing more than that, exploratory to see if any future deal is possible, while no commitments are on the table.
Microsoft has close ties with Yahoo, including a search deal that was struck after Redmond’s hostile takeover bid where Microsoft offered $45 billion for the company back in 2008. Of course, then Yahoo was only starting its downward spiral and any sale now would be around the $10 billion mark. The company probably wishes it had taken former Microsoft CEO Steve Ballmer’s offer seven years ago.
There was quite a lot of heat between the companies back then, with Yahoo favoring the chance to restructure and try to turn itself around under Mayer’s stewardship. While the CEO has been largely praised for her efforts, the results have failed to stop Yahoo from being a failing giant. She wants to continue the turnaround process, but this time it seems the company could be willing to listen to offers.