Yahoo! Inc. has become the apple of every company’s eye. Microsoft, News Corp., AOL, Google, and Legg Mason are all interested in a deal with Yahoo!
AOL, subsidiary of Time Warner Inc. (NYSE:TWX)
Time Warner’s AOL LLC is looking to repurchase some of Yahoo!’s shares above Microsoft’s offer of $31 per share and essentially AOL would be folded into Yahoo! The deal would make AOL valued at $10 billion and the dial-up access business wouldn’t be included.
Microsoft Corporation (NASDAQ:MSFT) and News Corporation (NYSE:NWS.A)
Microsoft and News Corp. are planning to launch a joint bid together to buy Yahoo! While this partnership is not official yet, a Wall Street Journal source confirms that discussions are serious. If acquired, this would combine some of the Internet’s hottest properties such as Live.com, MSN.com, Yahoo.com, and MySpace.com. Yahoo! confirmed 3 days ago that they are interested in an acquisition if the deal is higher than what Microsoft had to offer.
Google Inc. (NASDAQ:GOOG)
Yahoo! is launching a new advertising platform called AMP! but wants Google to be part of the action. Yahoo! is talking to Google about outsourcing ad search sales to them. This deal was made official yesterday in the form of a short-term test. Google would handle a limited percentage of Yahoo!’s web search queries. This test will be used to determine the feasibility of a longer term search-ad outsourcing agreement. It is in Google’s interest to work out this deal in the longer run to make Yahoo! less susceptible for a Microsoft acquisition.
Legg Mason Inc. (NYSE:LM)
Asset Management company, Legg Mason owns a large percentage of Yahoo! As a shareholder, it is in Legg Mason’s interest to capitalize as much as possible from any potential deal. CEO of Microsoft, Steve Ballmer wrote a letter telling Yahoo! that if they do not respond, then he’ll work directly with the shareholders. Legg Mason is only ready to support Yahoo!’s independence if the bid remains to be as low as it is now.
What happens to Yahoo! is anyone’s guess. Nobody said that running the #1 Internet property was easy.
 Wall Street Journal: News Corp., AOL Pursue Yahoo Deals by Matthew Karnitschnig, Kevin J. Delaney, and Merissa Marr