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]