Microsoft may bid again for Yahoo, report says

Reuters report speculates that Microsoft is studying whether to make a new move to acquire one-time Internet pioneer

Just three years after a failed attempt to buy Yahoo, Microsoft may be considering whether to try again, Reuters reported today.

According to the report, Microsoft executives are split on whether the company should bid for Yahoo. A final decision has not been reached, the report noted.

Citing an unnamed "high-ranking Microsoft executive," the report said Microsoft is evaluating whether to pull in a partner for a joint effort to buy Yahoo.

Microsoft said it doesn't comment on rumors or speculation. Yahoo didn't respond to a request for comment on the report.

"As long as Microsoft is committed to growing its online presence, this makes sense," said Ezra Gottheil, an analyst with Technology Business Research. "Yahoo has a large number of subscribers and regular visitors, many of whom are not considering going elsewhere. And that would be a good boost for Microsoft."

He also noted that Yahoo Mail, Yahoo's popular free email service, would combine well with Microsoft's own Hotmail service to create a very large base of email users.

"It looks like Yahoo is much more available than last time. More willing, or at least less unwilling," Gottheil added. "It's like a Jane Austen novel -- the Yahoo board no doubt regrets rejecting Microsoft's [past] advances."

In 2008, Microsoft tried to acquire Yahoo. Yahoo's argument that the bid was tool low prompted Microsoft to finally give up.

Since then, Yahoo has been dealing with some significant problems.

No longer the high-flying Internet pioneer of its heyday, Yahoo last month fired Carol Bartz, who had joined the company as CEO with high hopes that she could return the company to its past glory.

Yahoo is now searching for a new leader.

Once Bartz was out the door, industry analysts began speculating that Yahoo's board might be open to a solid acquisition offer.

However, Yahoo remains a large, unwieldy organization and thus a difficult aquisition target for many companies. Speculation has turned to Microsoft as a company large enough to handle the purchase.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, or subscribe to Sharon's RSS feed . Her e-mail address is sgaudin@computerworld.com.

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