Microsoft is currently evaluating its bid to buy Yahoo after saying that Yahoo may have lost value, according to sources telling Reuters.
The news of the re-evaluation saw Yahoo’s stock down by more than 5 percent after extended trade on NASDAQ. The source told Reuters that it has lost value after losing valuable key personnel, while giving pay rises to executives and full-time employees.
Yahoo’s board of directors have rejected the Microsoft bid on January 31st, after Microsoft offering $44.6 billion, above the now current value of $42 billion. They said that the bid “substantially undervalues” the company.
Yahoo have also started talks with News Corporation and Time Warner’s AOL to find alternatives to no avail.
The buying of Yahoo by Microsoft is seen to compete with Google, who is currently the leader in the search engine and advertising markets. Google is also currently siding with Yahoo to stop a possible buyout from Microsoft.
However, due to the recent market downturn and the fears of a possible recession, with Google’s shares being down more 16 percent since Microsoft’s offer. Sources also say the overall decline increased the premium of the deal.