Report: Yahoo, Microsoft Tensions Escalate

The relationship between Yahoo and Microsoft is getting even colder. Reuters is reporting that late Saturday, Yahoo revealed that it had spurned Microsoft’s latest attempt to buy its online search engine in a joint proposal made with activist investor Carl Icahn, who is leading a shareholder rebellion aimed at removing Yahoo’s current board.

The report said that Icahn, who has no experience running an Internet company, would have been “left in charge of Yahoo’s remaining pieces” had they reached an agreement to sell the search engine division to Microsoft.

“It’s not surprising that Yahoo would reject an offer like that,” Gartner Inc. analyst Andrew Frank said in the article. “It would be just too complicated to do.”

In another twist, and in an attempt to fend off a revolt, Yahoo’s board is now willing to sell the entire company to Microsoft for $47.5 billion, or $33 per share, the report said. That’s a price the company originally rejected as too low 10 weeks ago. But now Microsoft has said it “has no interest in buying Yahoo in its entirety as long as the company’s current board is in place.”

(Image credit: Robert Galbraith/Reuters)