Yahoo considers Google alliance

 

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By Reuters

Posted on 4 Feb 2008 at 08:30

Yahoo would consider a partnership with Google as a way to rebuff a $44.6 billion takeover by Microsoft, reports suggest.

Yahoo management is apparently ready to revisit alliance talks it held with Google several months ago, after the search giant made a new offer to help Yahoo thwart Microsoft's bid.

Google is not thought to be planning its own swoop on its rival, with any such move unlikely to win approval from antitrust regulators.

However, Yahoo's efforts could be a means of pressuring Microsoft into boosting its bid. Sources close to the company suggest Yahoo management believe the $31 per share offer undervalues the company.

"We want to emphasise that absolutely no decisions have been made and, despite what some people have tried to suggest, there's certainly no integration process underway," Yahoo informed employees in a memo.

Microsoft claims that buying Yahoo would create a "credible alternative" to Google, while alternative scenarios "only lead to less competition on the internet."

Google is unsurprisingly wary of the deal, and has urged regulators to take a long look at its implications.

Spokesmen for Yahoo and Google declined to comment.