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Microsoft in Yahoo search-deal talks, says report

Ina Fried CNET News

Published: 01 Dec 2008 10:28 GMT

According to a report, Yahoo and Microsoft may once again be working on a search deal.

The Times reported on Sunday that Microsoft is in talks to acquire Yahoo's search business for $20bn (£13bn). According to the paper, former AOL chief executive Jonathan Miller and fomer Fox Interactive president Ross Levinsohn are set to head the effort.

"Senior directors at Microsoft and Yahoo are understood to have agreed the broad terms of a deal, but there is no guarantee that it will succeed," The Times said in its report.

Microsoft declined to comment on the report. It is worth noting that as of Friday, the market capitalisation of Yahoo in its entirety was just shy of $16bn. Microsoft was once willing to pay far more to get Yahoo, but a lot has changed since the early part of the year.

Since Microsoft made its last offer for Yahoo, Yahoo and Google have announced and abandoned a search deal, Yahoo's shares have plummeted to single digits, and the company has said it would replace Jerry Yang as chief executive.

In the days following the Yang announcement, Microsoft chief executive Steve Ballmer indicated that the company was decidedly not interested in a full acquisition of Yahoo but said some sort of search partnership remained "an interesting possibility".

Kara Swisher of D: All Things Digital was told by Levinsohn the report was "total fiction", and sources from Yahoo and Microsoft denied such a deal was in the works.