Yahoo and Microsoft Close to a Deal, Reports Say

With Redmond executives flying to Yahoo HQ

Rumors are flying again with an “imminent” deal between Yahoo and Microsoft after several months of relative calm. The talks between the two companies are believed to be close to finalizing, with top Microsoft executives flying to Yahoo's headquarters in Silicon Valley and a deal announcement coming as early as within a week, claims the All Things Digital blog.

Yahoo has been in talks with Microsoft for a few years now, with the Redmond giant either bidding for the whole company or just some properties, coming very close to a deal a couple of times but so far nothing has materialized. In February last year Microsoft made an unsolicited takeover bid for Yahoo offering $44.6 billion but was initially rejected by Yahoo. Further attempts were made with Microsoft reportedly increasing the bid with $5 billion; however, Yahoo decided to hold out for even more. By May it looked like the deal wasn't going anywhere and on June 12 Yahoo announced that the talks had ended.

Recently there have been rumors and reports of Microsoft buying just Yahoo Search, which the company has been trying to get rid of for some time now as it was trying to focus on some core businesses. Yahoo CEO Carol Bartz has been doing some deep restructuring and closing down underperforming properties since she was appointed in January. The company's current strategy revolves around focusing on its home page and on social networking elements, pretty much abandoning the search business, which hasn't been able to make much headway into Google's massive share of the market for some years now.

The latest talks apparently involve Microsoft paying several billions for Yahoo's search advertising business with display advertising possibly involved somehow. The 24/7 Wall Street blog says Yahoo will get $3 billion upfront as well as a share of the revenue the search advertising brings in the first years. However, despite the deal being very close to completion, sources say that it may fall at any time and looking at the history between the two companies it wouldn't be that surprising.

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