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Yahoo rejected Microsoft search offer

Jo Best silicon.com

Published: 15 May 2006 11:05 BST

Yahoo chief executive Terry Semel has revealed he recently rebuffed Microsoft's attempt to bag a stake in the company.

Although the Yahoo boss didn't confirm what form the speculated overtures took, he slapped down the idea Yahoo would be willing to let Microsoft take a stake in the company.

According to a report in the Financial Times, Semel said: "Microsoft taking over Yahoo — that conversation has never come up."

He added: "[We discussed] search, and Microsoft co-owning some of our search. I will not sell a piece of search — it is like selling your right arm while keeping your left; it does not make any sense."

The paper said the discussions took place during negotiations over MSN's use of Yahoo's search technology. Microsoft has since switched to using its own homegrown search technology.

Nevertheless, Microsoft is still gunning for search glory — although Semel doesn't think the Redmond giant can achieve its dream.

Semel said: "My impartial advice to Microsoft is that you have no chance. The search business has been formed."