Microsoft offers US $20 billion for Yahoo: report

Alex Zaharov-Reutt
Sunday, 30 November 2008 17:08

Your IT - Home IT

The Times Online’s report says that “senior directors” at Microsoft and Yahoo have “already agreed the broad terms of a deal”, but still cautions “there is no guarantee that it will succeed.”

You'd have to think that Carl Icahn has been doing a lot of maneuvering behind the scenes to bring this deal about, especially seeing has he just raised his stake in Yahoo's business even further over the past week.

More details on how the bid is supposedly being structured and funded can be read at the original Times Online article, which makes it clear the deal isn’t a straight $20 billion purchase, but one that would give Microsoft a “10 year operating agreement to manage the search business” and a “two-year call option to buy the search business for $20 billion.”

Microsoft would want to turbo charge its online advertising efforts to take advantage of the traffic that still goes to the Yahoo search engine, and would surely promote all of its Windows Live services even though Yahoo would want to do the same with its webmail, messaging and content businesses.

Quite how the two sets of online services would be promoted, as they would be competing, is yet to be seen. But the deal has to be signed, sealed and delivered first, and perhaps Microsoft's plan is to buy those up in the future anyway.

It’s fascinating stuff, and while the deal is still not yet done, could reinvigorate Microsoft’s attack on Google at a time when Microsoft’s own “Azure online operating system” plans are finally taking shape, and as the future for Microsoft with Windows 7 looks a heck of a lot brighter than it did under Windows Vista.

Microhoo, Yahsoft - call it what you like, but it looks like it's back with Yahoo's most valuable asset of search.

This time, with Yang effectively out of the way, it looks much more likely that it's going to happen.

Time will tell, but fury hath no chair throwing wrath than a Ballmer scorned. The last laugh, and the last chair thrown, looks to be Ballmer's.

Surely he'll have a celebratory new monkey dance to thrill us all with when the deal is finally done?