Although there are no signs that Microsoft is interested in making a direct bid for Yahoo, the troubled internet company, senior officials of the technology giant have been meeting with interested private equity firms and have indicated that it would consider providing “significant financing” to help a deal, according to a report from, influential tech blog, Recode.
Marissa Mayer, the chief executive of Yahoo, effectively hung out the “for sale” sign last month when the company announced that it was exploring strategic options for its future, including separating its core businesses from its valuable stake in Alibaba, the Chinese ecommerce company.
Some Yahoo shareholders have become frustrated at the glacial pace of progress, and news of Microsoft’s interest comes a day after Starboard Value, the activist shareholder, mounted an all-out attack on Ms Mayer, seeking to oust the board and replace it with its own roster of nine hand-picked directors.
Ms Mayer has been under intense pressure for months to reverse the decline of the company after more than three years in charge.
However, despite spending more than $3 billion on acquisitions and introducing new features to attract traffic and advertisers, she has failed to deliver.
Microsoft’s interest comes as no surprise because it already has search and advertising ties with Yahoo. The companies signed a ten-year search deal in 2009, which at one point brought in about a third of Yahoo’s revenues. Ms Mayer renegotiated the agreement last year, securing more favourable terms for her company.
“If Microsoft put in a billion, it would cost them almost nothing,” one investor who had spoken to Microsoft told Recode. “It’s a minor thing and it buys them a lot.”
Other investors that have expressed an interest in buying all or part of Yahoo’s core search, display and content business include Verizon, AT&T, Time Inc and private equity firms, such as KKR and Vista Equity Partners.
Yahoo’s market value stands at $32.5 billion, but that includes its stakes in its Asian assets. After the spin-off of its Alibaba Group holdings, estimates of the value of its core businesses come in at $6 billion to $8 billion. Yahoo is seeking a sum closer to $10 billion, according to Recode.
Microsoft, which has previously expressed interest in buying Yahoo, mounted a hostile bid worth $33 a share in 2008, when Yahoo was worth about $45 billion. Yahoo was looking for $37 and Microsoft eventually walked away.
Yahoo shares, which have lost about 23 per cent of their value in the past year, closed at $34.86 on Thursday in advance of the Good Friday holiday.