Microsoft new Yahoo deal

SOFTWARE giant Microsoft has admitted that it is considering returning to the table with Yahoo – although any deal would not involve a full takeover.
A £24 billion bid for the internet search engine firm failed a fortnight ago as the company held out for a higher offer.And Yahoo also last week rebuffed an attempt by billionaire investor Carl Icahn to oust the current board over the failed merger.Now Microsoft has released a statement saying it is discussing an alternative transaction with Yahoo, although it did not offer further details.The company, headed by chairman Bill Gates and chief executive Steve Ballmer, said it "is not proposing to make a new bid to acquire all of Yahoo at this time, but reserves the right to reconsider the alternative".It said it is "considering and has raised with Yahoo an alternative that would involve a transaction with Yahoo but not an acquisition of all of Yahoo". It added that it is making the statement "in light of developments" since the bid was withdrawn two weeks ago. It said a deal may or may not follow from its latest statement on the matter.Any deal between the companies would be expected to allow Yahoo to mount a serious challenge to Google's market dominance.Microsoft's bid was withdrawn after Yahoo held out for a higher offer that the software firm was not willing to table. It said that it still "reserves the right" to table an offer for full control even although that is not currently being discussed.Yahoo may be more willing to work with Microsoft than it was earlier this month following the comments of Mr Icahn. But a source close to the billionaire investor believes he will not be supportive of any deal that does not involve a full acquisition."Microsoft is trying to get the milk without buying the cow, and if you look at Icahn's history, he has never been used that way," the source said. "He does not want to see Yahoo pushed into some joint venture with Microsoft and is not going to be used to push Yahoo into it."It has been reported that Microsoft and Yahoo may form a partnership or joint venture for search-related advertising to take on Google.But Yahoo is also continuing to talk to arch-rival Google about a potential search advertising partnership and it is understood that a deal could come as early as this week.In response to Microsoft's statement, Yahoo said it is "open to pursuing any transaction which is in the best interest of our stakeholders".