San Francisco (CA) - Yahoo has created a strategic partnership with Google and is reportedly in talks with AOL, while Microsoft may team up with News Corp to launch a new bid to take over Yahoo.

The AP suggests Yahoo's moves are "last-ditch efforts" to prevent an acquisition from Microsoft and is in effect creating a "dramatic finale" in this Internet saga.

In February, Microsoft announced it was looking to buy Yahoo for $44.6 billion but Yahoo ultimately declined, saying "our board believes the Microsoft proposal substantially undervalues Yahoo."

However, owners of the Internet stock leashed out against Yahoo, saying it was not living up to its fiduciary duty to maximize shareholder wealth.

One lawsuit, filed by pension fund group Michigan's Wayne County Employees' Retirement Group, claimed that Yahoo executives were "entrenching themselves in office and protecting and advancing their own interests at the expenses of Yahoo and its stockholders while Yahoo's stock price languishes."

On the heels of the Microsoft/Yahoo acquisition debate, Google stepped up to help Yahoo in online advertising, trying to show a higher value for Yahoo.

Additionally, Yahoo is now reportedly in talks to combine its online operations with AOL, bringing the two former Internet superpowers together to provide new advantages for both companies.

Not willing to sit idly by and still determined to bring Yahoo into its portfolio, Microsoft is also hashing out a potential deal with an online giant, News Corp.  The media conglomerate owns a ton of Internet entities under its Fox Interactive Media brand.

According to the New York Times, Microsoft and News Corp may be planning to offer a joint bid to acquire Yahoo.

"This would make the market far less competitive, in sharp contrast to our own proposal to acquire Yahoo," said Microsoft general counsel Brad Smith.

The situation has become increasingly complex, catapulting Yahoo to the front page of the Internet industry again.  It is possible that Microsoft's attempt to buy Yahoo earlier this year could actually backfire and make Yahoo a stronger rival.

Added Smith, "We will assess closely all of our options."

end up MS and news corp owns AOL and yahoo. what a ...

Apr 10, 2008 14:31     

end up MS and news corp owns AOL and yahoo. what a dumb move by yahoo to drag more companies in and make this a mess.
ha report abuse vote down vote up Votes: -2

Yahoo's only chance...

Apr 10, 2008 15:16     

sadly the only chance yahoo has to compete with google is to merge with M$. I just don't know why they don't see that. M$ should just do a hostile takeover and be done with this. Share holders would approve in a heartbeat.
Action Jackson report abuse vote down vote up Votes: -5

Yahoo's only chance...

Apr 11, 2008 01:48     

sadly the only chance yahoo has to compete with M$ is to merge with google. I just don't know why they don't see that. :)
Virtualban report abuse vote down vote up Votes: +0

can this be the end of M$ and Yahoo!

Apr 11, 2008 05:16     

I don't know, I feel like this merger can nail the coffin of both companies. I am not saying they all gonna go bankrupt. But.. there is a chance of losing many things after a merger. For an example, AMD ATI is the most talked merger in 2006. What happened? joined force didn't really worked out as we were expecting. My hypothesis is, merger between big companies can lead to disaster. Unlike a big company swallowing a small one. As you can see.. M$ has to pay through nose to acquire yahoo. So.. it can be the death knell to M$ as well as yahoo! I don't know how other feeling. As a person who started learning computing with Win3.1 and started web searching using yahoo.... I don't want them to have a tragic death. cheers!

Alien report abuse vote down vote up Votes: +1

The Substantial undervalue of Yahoo!?

Apr 12, 2008 00:39     

IMHO Yahoo!'s board are only interested in substantially higher bonuses when moving in to the Microsoft house. Their business has been in decline for a while, and acquisition by Microsoft would bring in significantly higher income than if Microsoft took the majority control share of their stock.
9Nails report abuse vote down vote up Votes: +0

Ya-who?

Apr 13, 2008 05:16     

Yahoo!'s identity as an advertising and search portal has been diminishing over the years. Once a dot-com darling, Yahoo! is now an also ran to Google. Sure, they're closer to the tip of the tongue than Ask, but Ask is focused as a Search portal and does that job as good or better than Google. Yahoo! on the other hand, has lost focus and sprawled into many competing services. And not one of their services is a stand-out in the crowd. They have the look and feel of hard candy - with no substance that you can chew and enjoy. I'm quite surprised that Microsoft wants to buy them instead of developing it's own applications and compete with them. I honestly think that MSN, Hotmail, and Live are not Microsoft's strongest attack against the ad dollars that Yahoo! earns. And Microsoft's money would have greater returns if they developed in-house products instead of acquiring an over-valued has-been.

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