News Corp or AOL primed for Yahoo takeover

Firms including News Corporation and AOL have been sounded out over a possible buyout of Yahoo, according to sources close to the search company.

News Corp or AOL primed for Yahoo takeover

The news comes as Yahoo struggles to revive its revenue growth under the management of chief executive Carol Bartz, and to rebuild its buzz among consumers amid competition from social-networking sites such as Facebook.

Private equity firms have held talks with News Corp and AOL about a potential takeover over the past fortnight, but Yahoo had not yet been approached as talks were still in their early stages, the source said.

Yahoo shares have surged by more than 10% on the back of the speculation.

Rumours of private equity interest in Yahoo, which is struggling to stem an exodus of senior executives to rivals, has surfaced sporadically in the past few months.

Silver Lake Partners was among the firms in very preliminary, recent discussions about acquisition scenarios, a second source with knowledge of the matter said. Blackstone had also been pitched the idea but was not currently working on a Yahoo deal, a separate source said.

News Corp, AOL, and Yahoo declined comment.

In 2008, Microsoft failed in an audacious $44.6 billion takeover bid for Yahoo, with the two companies eventually agreeing to let Microsoft’s Bing power Yahoo’s search engine in a ten-year deal. Today, Yahoo has a market capitalisation of less than half the sum Microsoft was prepared to pay for the company.

Once dominant in search, Yahoo has been overshadowed by Google’s growth and its market value is now little more than a tenth of its rival.

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