Microsoft Seeking Allies for New Move on Yahoo

Yahoo shares rose more than 6 percent Wednesday as The Wall Street Journal reported Microsofthas talked to other media companies about teaming up to buy Yahoo’s search business.

Yahoo Headquarters
Yahoo Headquarters

The paper reported Microsoft has spoken to News Corp. , Time Warner and others about a way to complete the proposed deal, which the software maker has been exploring since withdrawing a $47.5 billion bid to buy Yahoo in its entirety in May.

Microsoft had previously proposed buying Yahoo’s search operations for $1 billion and investing an additional $8 billion for a 16 percent stake in Yahoo’s remaining business.

Sunnyvale, Calif.-based Yahoo rejected that offer, too, and instead forged an advertising partnership with Google , whose rapid growth prompted Microsoft’s bid for Yahoo in the first place.

The Journal suggested that Microsoft would still buy Yahoo’s Internet search business, and the rest of the company would be combined with another outlet, like News Corp.'s MySpace or Time Warner's AOL.

The talks were described as preliminary and seen by some people as unlikely to result in a deal with Yahoo, the Journal said, citing unidentified sources familiar with the talks.

Calls to Microsoft and Yahoo were not immediately returned.