New Developments In Yahoo Difficulties

Posted Friday 15th February 2008 by Catherine in SEM News.

There have been further developments this week in the on-going battle for supremacy of the search engines.

Google has been on top for a long time, with Yahoo feeling the effects. Within the last two weeks, Microsoft made a bid to buy out Yahoo and inject their know-how in an attempt to worry Google. I believe Google are, so far, unfazed by this activity.

The £22.6 billion offer from Microsoft was rejected on Monday because, Yahoo say, it undervalues their business and is not in the best interests of their shareholders.

The latest attempts to help Yahoo out of a hole involve The News Corporation offering to inject cash into the business in the form of merging their popular social networking site, MySpace, to fend off the Microsoft takeover which is now seen as hostile.

The News Corporation are a force to be reckoned with. After buying MySpace in 2005 for a mere £294.2 million, they then went on to purchase Wall Street Journal publisher, Dow Jones, last year for £2.37 billion.

With an unnamed private equity firm, The News Corporation have offered this leg up to Yahoo in exchange for a 20% stake in the business. This seems an attractive deal to Yahoo as they will keep control of their company but they are still keeping their options open.

Yahoo has re-opened merger talks with AOL and it seems they have several options to ward off the Microsoft takeover.

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