Microhoo not dead? Microsoft, Yahoo reported to have search deal talks

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According to the UK’s Sunday Times, Microsoft is reported to have started talks with Yahoo to acquire Yahoo’s search business for US$20 billion – proving once again, Microsoft cannot stay away from Yahoo. However, senior directors at both companies have not guaranteed that it will be a success.

“Senior directors at Microsoft and Yahoo are understood to have agreed the broad terms of a deal, but there is no guarantee that it will succeed,” The Times has said in its report.

If Yahoo does sell its search business, it would give Microsoft a huge boost in its own Windows Live brand, especially in its Search offering – Windows Live Search, and it may also include its search advertising, but we do not know if that is true. The US$20 billion pricetag is a bit steep, especially during this climate; however, Microsoft does have a history of paying more to get the deal, especially with Yahoo – like its original bid, where it offered $33 per share.

The price is also $4 billion more than its market capitalisation of just under $16 billion.

The deal comes weeks after Yahoo announced that Jerry Yang has decided to go back being Chairman and Head Yahoo!, and also the failed Google-Yahoo ad deal that was supposed to deter Microsoft away from the company.

Image from JVManna/Flickr.