Microhoo: It’s Back On!

December 2nd, 2008 at 12:00 am

microsoft, yahoo, microhoo

Talks between software maker Microsoft and internet giant Yahoo! are back on according to the Times Online.

Just a really quick refresher,  at the end of Q1 2008, Microsoft makes an unsolicited bid to acquire Yahoo for $33/share or about $47 billion.  Yahoo! declines the offer, investor Icahn starts a proxy fight, Microsoft backs out, Yahoo shares plummet, Icahn gets 3 seats on the board, Google and Yahoo propose a search deal, Microsoft bitches around, Google dumps Yahoo on antitrust issues, Microsoft gloats, Yang steps down, Icahn buys more shares, Yahoo looks for new CEO, which leads us to today.

Apparently, with Jerry Yang stepping down from the CEO post, the outlook for Yahoo’s future is brighter.  Brighter in the sense that Microsoft is back on the negotiating table.  However, this time they aren’t against he whole company, just Yahoo!’s search business.

Under the terms of the proposed transaction, Microsoft would provide a $5 billion facility to the Miller and Levinsohn management team. The duo would raise an additional $5 billion from external investors.   It is thought that Jonathan Miller, ex-chairman and chief executive of AOL, and Ross Levinsohn, a former president of Fox Interactive Media, have been lined up to lead the new management team.

So this Miller and Levinsohn management team may be the key to the deal’s success, however, it still isn’t known if either will be taking the CEO position.  What is kown though, in the proposal the managament team will be selecting 3 board members, as well as involve Microsoft obtaining a 10-year operating agreement to manage the search business. Microsoft would also receive a two-year call option to buy the search business for $20 billion. That would leave Yahoo to run its own e-mail, messaging, and content services.