Yahoo-Microsoft talks fail, Google deal expected
A deal with Google is now looking to be on the cards.
Instead, Yahoo is close to a search advertising deal with Google Inc and an announcement could come later in the day, sources familiar with the matter said.
The software maker had sought a deal with Yahoo for more than a year. By early May. Microsoft had offered up to $47.5 billion to buy the Internet company.
Microsoft hoped an acquisition would accelerate its ability to capitalize on Internet advertising growth and better compete with Google, which is increasingly fighting for the same audience of Internet users.
"It was pretty clear it was going to be one or the other. Yahoo wasn't going to do a deal with Google and then partner with Microsoft," Global Crown Capital analyst Martin Pyykkonen said.
Yahoo said on Thursday that Microsoft had made it clear in a meeting on June 8 that it was no longer interested in buying the company outright, even at the price of $33 per share Microsoft had most recently proposed.
That may not appease Yahoo shareholders, including billionaire Carl Icahn, who have been pressuring Yahoo to reach a deal with Microsoft. Icahn has called for Chief Executive Jerry Yang to be ousted.