Yahoo board meets to discuss competing offers

Other News Materials 12 April 2008 04:28 (UTC +04:00)

( dpa ) - The board of Yahoo met Friday to discuss a long-simmering takeover offer from Microsoft and alternative strategies like a merger with AOL and a search advertising deal with Google.

There was no immediate word on decisions taken at the meeting, but analysts said that the scope of the Microsoft offer still made it the most attractive to Yahoo shareholders.

Yahoo is holding out for a higher price than Microsoft's offer, which values the company at between 41 billion dollars and 45 billion dollars. Microsoft insists the offer is fair and warned it would drop its price and launch a hostile bid if its offer is not accepted within three weeks.

The meeting took place after a flurry of negotiations this week that saw Microsoft holding talks with Rupert Murdoch's News Corp to form a joint bid for Yahoo. The deal would create a new internet giant by combining Yahoo with Microsoft's MSN and News Corp's MySpace.

Separately Yahoo and AOL were said to be "closing in on a deal" in which Yahoo would receive a cash investment from Time Warner in exchange for a 20-per-cent stake in the combined Yahoo-AOL business. The deal would value AOL at about 10 billion dollars.

Yahoo also plans to outsource some of its search advertising to Google in a bid to raise revenues. The test program is designed for the two sides to evaluate the revenue potential of a broader search ad outsourcing arrangement.

While a broad alliance between the two search giants would likely fail to pass antitrust regulations, a more limited partnership would boost Yahoo revenues by as much as 1 billion dollars a year by allowing it to tap into Google's more profitable search advertising system.