Microsoft May, May Not Consider A Bid for Yahoo

Microsoft may or may not be placing a bid to purchase Yahoo, depending on the source.

Reuters reports that Microsoft is (again) considering a bid for Yahoo. The news arrives after the Redmond-based company failed to assimilate Yahoo back in 2008 after a long and bitter battle.

According to unnamed sources, the Redmond company is just one of many looking at Yahoo and its market value of about $20 billion. The Internet search company, which recently reached an agreement with ABC to share content, is reportedly readying financial pitch books for potential buyers including Providence Equity Partners, Hellman & Friedman and Silver Lake Partners, as well as Chinese e-commerce giant Alibaba, and Russian technology investment firm DST Global.

So far no decision on Microsoft's part has been made. An unnamed high-ranking Microsoft executive said that there are "internal divisions" on whether the company should pursue Yahoo again, so there's a good chance that a bid may not even materialize. But if Microsoft does go after Yahoo, it will do so with a partner, not alone.

Currently Yahoo's financial advisers, Goldman Sachs and Allen & Co, are preparing to send financial information to potential bidders. Previously the search engine company said that it was exploring strategic alternatives after receiving "inbound interest" from a number of parties once former CEO Carol Bartz was ousted back in September.

Microsoft originally offered more than $44 billion to acquire Yahoo in an unsolicited bid back in January 2008. The deal was eventually blocked by Yahoo management, but the side effects of the failed attempt resulted in a sharp decline in stock price and the ousting of former CEO Jerry Yang. Microsoft and Yahoo eventually made peace with one another, signing a search partnership agreement.

But as previously stated, Microsoft is seemingly divided over another acquisition attempt. One side is approving the deal, believing that it will create a stronger Web portal for the company while obliterating AOL as a competitor. But the other side isn't convinced, believing that if Microsoft plans to sink billions of dollars into something, it should at least have more growth potential. As it stands now, Yahoo's value "hasn't grown in years."

An additional report based on unnamed sources claim that Microsoft doesn't have any interest in Yahoo whatsoever, and that top executives have painstakingly made it clear that the company will not be among the Yahoo bidders in any significant manner. The company has reportedly even communicated with the possible bidders, letting them know that Microsoft will not be a partner until a deal is made, and then it might offer token investment just to get the deal completed.