Microsoft Corporation (NASDAQ:MSFT) and Yahoo! Inc. (NASDAQ:YHOO) are supposedly in talks once again.  Microsoft is rumored to be wanting to buy out Yahoo!’s online search business for $20 billion.  The acquisition would bring a Microsoft management team to take control of Yahoo!  Jonathan Miller, former AOL CEO is believed to be brought on the combined management team.

Carl Icahn recently bought an additional 7 million shares of Yahoo! this past week which indicates that something big may be happening soon.  Jerry Yang also recently stepped down from the CEO position and is searching for a replacement.

Microsoft would setup a $5 billion facility for Miller and Ross Levinsohn, former President of FOX Interactive Media to run Yahoo!  These two would also raise an additional $5 billion from external investors.  Microsoft would have operating control of the search business for 10 years.  Microsoft would also be given a two-year call option to buy Yahoo!’s search business for $20 billion.  Yahoo! would be left with it’s e-mail, messaging, and content services.

[Source: Times Online UK]

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