Microsoft (MS) and Yahoo! now both both seem to be denying that a deal is in the works for MS to buy Yahoo!’s search business for (US)$20 billion. But, as they say, the Devil is in the details and the doubt is in the wording: Both companies have simply stated that they don’t comment on rumours. That sort of comment usually means that the reports are not necessarily wrong but that the principles in the deal simply aren’t ready to talk about it yet.


The report, which circulated widely yesterday, was based on a story in the London Sunday Times. That story suggested that MS would buy Yahoo’s search business but that Yahoo would continue to operate its e-mail, messaging and content services.

Yahoo! rebuffed an unsolicited offer from MS to buy the whole business last for (US)$42.5 billion July. That scenario turned into a personal tiff between yahoo! CEO Jerry Yang and MS CEO Steve Ballmer. Yahoo! subsequently courted a deal with Google to cooperate on advertising and search but Google backed out, citing fears of a long, costly anti-trust battle.

Then, Yang stepped down as CEO of Yahoo! under pressure from his directors shareholders. And, less than two weeks later, the reports of the MS offer for Yahoo’’s search business surfaced. Observers suggested that Ballmer was just waiting for Yang to leave before approaching Yahoo! again.

This story is still far from over… Stay tuned!

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