Microsoft Buying Yahoo: Rumors Reappear

    May 4, 2007
    WebProNews Staff

A year ago, the two companies were reportedly in talks about a merger, but those conversations were dismissed as rumors and speculation. Well, here’s Microsoft and Yahoo 2.0.

Microsoft Buying Yahoo: Rumors Reappear
Microsoft Buying Yahoo: Rumors Reappear

A pairing in the spirit of a superhero teamup could happen if the latest chatter about Yahoo and Microsoft proves true. Once again, a potential merger is being considered, as neither company has made gains against Google’s search and advertising dominance.

The Wall Street Journal said last year’s talks have become this year’s discussions. Both Yahoo and Microsoft have been rejiggering their online advertising products, but have not been able to eat into Google’s lead.

“Short of a wholesale merger, Microsoft could spin its online group into a separately-run Yahoo, in return for a Yahoo stake,” the WSJ said. “Though a person familiar with the matter says Microsoft would likely want to acquire Yahoo.”

Microsoft would have to take on some debt to do that, despite its massive pile of cash and equivalents. Yahoo is up to a market cap of over $38 billion, thanks to rumors of the Microsoft talks that began in the New York Post.

The Post carried a story earlier in the week that claimed Microsoft was ready to purchase 24/7 Real Media, in order to offset Google’s DoubleClick deal as well as Yahoo’s Right Media purchase. A Microsoft spokesperson would not comment on the story to WebProNews, citing the article as rumors and speculation.

If Microsoft were to make a deal with Yahoo, the WSJ thinks there could be some massive upheaval in Yahoo’s executive ranks. Considering Yahoo’s performance for shareholders over the past couple of years, it’s hard to think of that as a negative here.