Microsoft said to be evaluating Yahoo bid

• IBTimes RSS
• Print
• E-Mail
• digg
• Del.icio.us

SLOWING GROWTH

Roiling markets and ongoing economic woes have depressed Internet shares, with Google Inc, Yahoo's most direct competitor, down more than 16 percent since Microsoft's offer.

The sources said the overall decline in the market has inflated the premium Microsoft is offering for Yahoo.

Microsoft's bid for Yahoo is widely seen as the Redmond, Washington-based company's attempt to take on Google, which leads the U.S. search and paid advertising market.

Google's shares fell 3 percent in February on the day Web measurement firm comScore said "paid clicks" - a key measure of how Web searchers are converted into ad viewers - grew only modestly year-on-year.

According to comScore, Yahoo's share among the top five Web search providers dropped from 22.2 percent in January to 21.6 percent in February. These are signs, according to the sources, of deterioration in Yahoo's core businesses.

In February, Yahoo instituted "golden parachutes" for its executives and full-time employees, pumping up benefits in the event of an acquisition.

Microsoft and Yahoo executives have met at least once since the offer to discuss a potential merger, a source told Reuters earlier.

Yahoo has also held talks with News Corp and Time Warner Inc's AOL division about potential combinations, but these discussions appear to have yielded no alternatives yet.

A person familiar with Microsoft's thinking earlier told Reuters the company sees no reason to raise its bid and would not bid against itself.

• 1
• 2
• 3