Yahoo and Microsoft Rumoured To Be Discussing Possible Search Engine Sale
It has been reported by the Sunday Times here in the UK, that Microsoft is going to buy Yahoo’s search business for $20 billion in a very complex transaction. The Sunday Times claims that Jonathan Miller formerly chief executive of AOL, and Ross Levinsohn, a former president of Fox Interactive Media are going to run the new management team.
Under the terms of the proposed transaction, Microsoft would provide a $5 billion facility to the Miller and Levinsohn management team. The duo would raise an additional $5 billion from external investors. This cash would be used to buy convertible preference shares and warrants which would give it a holding in excess of 30% of Yahoo. The external investors would also have the right to appoint three of Yahoo’s 11 board directors. The talks with Yahoo involve Microsoft obtaining a 10-year operating agreement to manage the search business. It would also receive a two-year call option to buy the search business for $20 billion. That would leave Yahoo to run its own e-mail, messaging, and content services. It is expected that the operating agreement would boost Yahoo’s income by as much as $2 billion per annum.
This deal has been total denied by most of the parties involved. However, the reports seem to be very specific, so if it isn’t finalised at the moment, then I’m sure it will be in the coming months.
Check out the other coverage from Techcrunch, Gigaom, AlleyInsider, Inquistr, Venturebeat, AllthingsD, Paidcontent, and ReadWriteWeb.
AlleyInsider reported that, “The $20 billion number is almost certainly fiction, given that, last summer, Microsoft offered to buy Yahoo’s search business for $1 billion. Microsoft also wants to own and run the search technology, so the idea of having a call option doesn’t really make sense.”
