Putting an end to speculation that it had persuaded Carl Icahn to launch a battle for control of Yahoo, Microsoft announced Sunday that it is in fresh talks with Yahoo for another deal. The present offer is rumored to be for a deal which stops short of a full acquisition. Analysts feel that such a deal may be in Yahoo's interests. Says Troy Mastin,'If they structure a deal correctly, they might still be able to retain a lot of the control and autonomy that they have today.'
Yahoo meanwhile stuck to its familiar line that it is open to any offer which is in the best interests of its shareholders.
A deal between the two companies is likely to be a win-win situation for both of them. Yahoo on its own has not been going anywhere on its own for some time now, and Microsoft is desperate to penetrate the internet, a market which it had ignored till now. Online ad sales reached $41 billion worldwide last year, and they are projected to double by 2010.
According to reports, under the proposed deal Microsoft will place advertisements alongside Yahoo's search results in order to fight competition from Google. The details of the deal are expected to become known this week.Carl Icahn's reaction to a sort of joint venture between Yahoo and Microsoft will also be known. Whether it would satisfy him , or he would still insist on a complete buyout of Yahoo remains to be seen.