It is no secret that one of the forerunners of the Internet, Yahoo! Inc., has been in financial trouble for some time. It is also no secret that Microsoft has shown an interest in acquiring the firm in the past. In fact, Microsoft has attempted to acquire parts of Yahoo! twice, albeit unsuccessfully.
With the news that Yahoo! is considering the sale of its core businesses, it is no surprise that reports have emerged that Microsoft, a familiar name when it comes to the acquisition of Yahoo!, is once more looking into buying a stake in the Internet forerunner. This time, however, Microsoft is taking a relatively different path.
Sources, who have opted to remain anonymous, say that Microsoft executives have been meeting with private equity firms who are interested in acquiring Yahoo!'s core business. What is particularly interesting is Microsoft's alleged strategy, which involves offering the interested firms notable financing in order to better equip them for their bids.
By hook or by crook, Microsoft really does seem intent on being part of Yahoo!'s acquisition, even to the point of taking a step back and letting other firms go on the frontlines of the takeover.
The sources, however, have stated that Microsoft's talks with the private equity firms are still in their preliminary stages. Unsurprisingly, Microsoft has yet to issue a comment on the allegations.
With the company still in dire financial straits even after years of trying to turn the company around, many organizations, such as Activist hedge fund Starboard Value LP, have expressed their disappointment at Yahoo!'s leadership. On Thursday alone, Starboard moved to overthrow the entire board of Yahoo!, stating that the company's executives have been too slow to react to market headwinds.
Then again, reports have also emerged that Yahoo!'s board is asking $10 billion for its core businesses. Though the amount would probably be minuscule for a giant like Microsoft, analysts believe that the actual worth of Yahoo!'s Internet core business is far less.