Yahoo! and Microsoft continue non-buyout talks

Thu May 29 2008, 11:20 AM

Microsoft and Yahoo! have confirmed they are in talks over a possible deal, but they have both have ruled out a Microsoft takeover. Speaking at the All Things Digital conference in San Diego, Yahoo! CEO Jerry Yang says "Microsoft is no longer interested in buying the company" but are discussing "various other partnerships with us". This confirmed comments made by Microsoft CEO Steve Ballmer in a speech the day before. Speaking at the same conference, Ballmer said: "We walked away. Now we are talking about other things with Yahoo," reports AFP.

Deal Details

The news follows rumours from last week which said that Microsoft is negotiating a deal to buy a minority stake in Yahoo!'s search and online ad business. Under such a deal, Yahoo! would reportedly divest its Asian operations, which include Yahoo! Japan and a stake in Chinese online marketplace Alibaba.

Earlier this month Microsoft refused to up its USD44.6bn takeover offer for Yahoo! and walked away from the deal. However billionaire investor Carl Icahn is currently involved in a proxy battle to replace the Yahoo! board with a slate of Microsoft-friendly directors, reportedly in the hope to revive talks.

"We are not re-bidding," said Ballmer yesterday "but we reserve the right to do so."