Microsoft to bid for Yahoo again
Microsoft joins a host of other companies looking at Yahoo, which has a market value of about $20 billion and is readying financial pitch books for potential buyers, they said.
Those companies include buyout shops Providence Equity Partners, Hellman & Friedman and Silver Lake Partners, as well as Chinese e-commerce giant Alibaba and Russian technology investment firm DST Global, the sources said.
One camp inside Microsoft is hot for the deal, believing that it would obliterate AOL Inc as a competitor and create a strong Web portal that can offer better products to audiences, advertisers and end users, the executive said.
However, another camp is against the deal, feeling that if Microsoft is going to invest billions of dollars in an acquisition it should be one that has more growth potential. Microsoft last tried buying Yahoo in 2008, offering to pay as much as $47.5 billion, or $33 per share.
"Yahoo's value hasn't grown in years, and some executives feel we should buy something that is more forward-looking," said the executive, who spoke on condition of anonymity.
Yahoo, Microsoft and the other potential buyers declined to comment.
Microsoft is making slow progress in combating Google's dominance in search advertising. According to the latest figures from research firm comScore, Google has 64.8 percent of the U.S. search market, Yahoo has 16.3 pct and Microsoft 14.7 percent.
But even with traffic from Yahoo, Microsoft still has not attracted enough advertising dollars and profitability in search is a long way off.
Last quarter, Microsoft's online services unit -- which includes Bing and the MSN web portal -- lost $728 million. It has lost almost $6.5 billion over last three fiscal years.
