By Anupreeta Das
29 minutes ago
As part of the deal Yahoo would put its Asian assets,
including significant minority stakes in Yahoo Japan (4689.T)
and China's Alibaba Group, up for sale, while Microsoft would
buy a chunk of what remains of the company, the source said.
The talks were revealed by the two companies on Sunday, but
they declined to reveal the terms of the discussions. Earlier
this month, Microsoft walked away from a proposal to acquire
Yahoo for $47.5 billion, or $33 per share, after Yahoo rebuffed
the offer, saying it would only settle for $37 a share.
The new deal, if completed, would forge an alliance between
the two companies that would represent an alternative means of
competing with rival Google Inc (GOOG.O), whose ubiquitous
search engine has made it an online advertising powerhouse.
The proposal represents an outline of Microsoft's current
thinking and it does not yet put a value on Yahoo's search
business, said the source, who was not authorized to speak on
the record because the discussions are confidential.
Microsoft and Yahoo representatives declined to comment.
Shares of Yahoo fell as much as 0.87 percent on Monday,
before closing up 2 cents at $27.68 on Nasdaq. Microsoft
dropped 1.8 percent to $29.46.
Collins Stewart analyst Sandeep Aggarwal estimates Yahoo's
search advertising business is worth about $21 billion, while
putting the value of its international assets at $9.25 billion,
according to a research note he published on Monday.
"Microsoft is the most interested in Yahoo Search," said
Aggarwal, who added that Microsoft may buy parts of Yahoo for a
premium or buy all of Yahoo and then spin off certain assets.
Shares in both Yahoo Japan and Alibaba Ltd (1688.HK)
dropped 4 percent on the new proposal, thanks to the greater
uncertainty now hanging over the two companies.
"We had always looked at Yahoo Inc teaming up with
Microsoft as a positive for Yahoo Japan," said Macquarie
Securities analyst Nathan Ramler.
"The fact that Yahoo Japan is potentially not included is a
concern," he said, adding that the Japanese company could have
benefited from Microsoft's expertise in software, personal
computers and its deep pockets.
CHASING GOOGLE
Microsoft said on Sunday that it was talking with Yahoo
about an alternative transaction that did not involve a full
buyout after withdrawing its sweetened $47.5 billion bid for
the company on May 3.
Yahoo is a distant second to Google Inc (GOOG.O) in Web
search in the United States, and Microsoft is third.
Combined, Yahoo and Microsoft would have around a 30
percent U.S. share, compared with Google's roughly 60 percent,
according to figures from research firm comScore. Google's lead
is even larger on a global basis, according to comScore.
The proposal from Microsoft would likely complicate ongoing
discussions between Yahoo and Google. The two companies are
still talking about a possible search advertising partnership,
people familiar with those discussions have told Reuters.
propertiesYahoo MailFlickrYahoo
(Additional reporting by Eric Auchard in New York, Daisuke
Wakabayashi in Los Angeles and Edwina Gibbs in Tokyo; editing
by Carol Bishopric, Jeffrey Benkoe, Richard Chang)
0 comments:
Post a Comment