Yahoo hints at Google tie-up


Internet Giant Yahoo has just triggered war in the tech world by hinting at a tie-up with Google, to resist Microsoft's hostile take over bid.
Yahoo management is considering revisiting talks it held with Google several months ago on an alliance as an alternative to Microsoft's bid, a source told a news agency.
Combined, Microsoft and Yahoo will together control just 16 per cent of the world's online search market, far less than Google's 62 per cent share. However, they would own a lion's share of the world's email and instant messaging market, which is Google’s main concern
While Microsoft claims that with Yahoo, they can break Google's stranglehold and serve consumers better, Google warns Microsoft could unfairly use its Windows OS, that runs most computers worldwide, to automatically divert users to its new search engine.
At $31 a share, Yahoo believes the bid undervalues the company, two sources said. A second source close to Yahoo said it had received a procession of preliminary contacts by media, technology, telephone and financial companies. But the source said they were unaware whether any alternative bid was in the offing.

In a memo to Yahoo employees on Friday, which was obtained by Reuters on Sunday, Yahoo leaders wrote: "We want to emphasize that absolutely no decisions have been made -- and, despite what some people have tried to suggest, there's certainly no integration process underway." Few natural bidders exist besides Google that could engage in a bidding war, and Google would be unlikely to win approval from antitrust regulators, some Wall Street analysts said on Friday.
The Wall Street Journal reported on its Web site on Sunday that Google's chief executive Eric Schmidt called Yahoo's chief executive Jerry Yang to offer his company's help in any effort to thwart Microsoft's bid. Spokesmen for Yahoo and Google declined comment. Google was not immediately available for comment on the WSJ story. Yahoo's efforts to find an alternative bidder could simply be a measure to pressure Microsoft to boost its bid, which valued Yahoo at $44.6 billion when first announced on Friday.

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