Microsoft Planning to Win 10 Year Contract to Operate Yahoo Search

Hot off the press – the Yahoo-Microsoft merger is on the cards again as partnerships are forming. Although there is unlikely to be a complete takeover of Yahoo by Microsoft, the wheels are in motion for Microsoft to have a controlling stake in Yahoo, and to operate its search engine. This means that the Microsoft-Yahoo collaboration has the potential to rival the might Google and its mega search engine.

“Nov. 30 (Bloomberg) — Microsoft Corp. is backing a new management team to take control of Yahoo Inc.’s search business following its failed takeover attempt, the Sunday Times of London reported.

Microsoft will put up $5 billion to back Jonathan Miller, the former chief executive officer of AOL and Ross Levinsohn, a former president of Fox Interactive Media, the newspaper reported, without saying where it got the information.

The duo would seek to raise an additional $5 billion from institutional investors to buy a stake of over 30 percent in Yahoo, the Sunday Times said. The terms would give Microsoft a 10-year operating agreement to manage Yahoo’s search business, plus a two-year option to buy it for $20 billion.

Senior directors of the two companies have agreed the outline of the deal, the newspaper said without citing anyone.

A call to Microsoft’s press office in Portland, Oregon, by Bloomberg News outside office hours wasn’t immediately returned. An e-mail and phone call outside office hours to Emily Fox, a Sunnyvale, California-based spokeswoman for Yahoo, wasn’t immediately returned.” (Source: Bloomberg)

The full news story can be found on the Sunday Times. The Sunday Times adds;

Analysts say it is an opportune time for Microsoft and Yahoo to work on a new deal. There is a management vacuum at Yahoo after Jerry Yang, the group’s co-founder, said this month that he will step down as chief executive as soon as the board finds a successor. He opposed the earlier Microsoft deal and an advertising alliance with Google that he championed broke down because of competition fears. Source: Sunday Times

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