Rumors from Big money

I saw this via bloomberg, it is a post on the Microsoft/Yahoo rumours from this weekend...

More Microhoo Rumors
By chris.thompson
Created 12/01/2008 - 10:47am
Feeling Lucky [1]
The Sunday Times of London [2] writes that Microsoft [3] is floating a new plan to manage and possibly buy Yahoo's [4] search function, handing the company a wad of cash and freeing it to focus on e-mail and Internet content. John Waples claims that Microsoft will offer a $5 billion loan to former AOL CEO Jonathan Miller and former Fox Interactive Media president Ross Levinsohn, who will find another $5 billion from other investors and buy 30 percent of Yahoo, plus the right to appoint three of the company's eleven directors. Under the deal, Microsoft will run Yahoo's search business for ten years, with a two-year option to buy it outright for $20 billion. Yahoo, which has seen its stock plummet to less than $10 a share this year, would receive an annual $2 billion in revenue from the deal.
Sounds great, right? But note the absence of any named source in the story, a longtime symptom of Britain's Sunday papers. Longtime tech journo Kara Swisher [5] called Levinsohn about the story, and Levinsohn dubbed it a "total fiction." Swisher also notes that Yahoo's present market cap is considerably less than the $20 billion Microsoft will supposedly offer for its search function, although this wouldn't be the first time someone broke the bank to buy a rival. Finally, Swisher writes that investor Carl Icahn, who as a Yahoo director would surely know if any such deal were in the works, recently bought a big new chunk of Yahoo stock. Icahn, Swisher claims, is smart enough to know such a move would immediately scream "insider trading" and land him in a heap of trouble.
Still, most analysts think some sort of Microhoo search arrangement is inevitable, and the search market will emerge as a duopoly if Google [6] is to be stopped at all. Currently, Yahoo and Microsoft together account for 29 percent of the total searches in the country, which would give them just enough muscle to compete with Google's 63.1 percent share. Individually, however, they've been helpless against Google's onslaught.
Press Page
• About Us
• Advertising
• Our Partners
User Agreement and Privacy Policy
• User Submission and Message Board Guidelines
© 2008 Washington Post.Newsweek Interactive • All rights reserved.
Source URL: http://tbm.thebigmoney.com/blogs/feeling-lucky/2008/12/01/more-microhoo-rumors