A recent report from the Wall Street Journal suggested that search giant Google has reached out to a couple of private equity firms about assisting them with finance to bid for Yahoo.
Since Google has been under regulatory scrutiny from Governments around the world it likely unable to make a direct bid for Yahoo!, but the assistance of other investors would certainly help.
Why would Google be so keen to buy Yahoo! when it already holds two-thirds of the internet search market? Well, there are number of reasons why Google would seriously pursue this bid. Firstly, Yahoo’s audience of 700 million users is definitely not a number to be overlook. Secondly, its well known that anything that Microsoft expresses interest in Google will also pursue, thus Google is showing keen interest in the bidding game to take over Yahoo!. Finally, if Google does buy Yahoo!, then they will hold a significant lead in market share on the internet industry.
Various sources have told the WSJ that Microsoft is planning to act as source of financing for others in exchange for preferred stock and some “influence” over Yahoo’s future:
Microsoft Corp. may help to bankroll a potential joint bid for Yahoo by extending loans to its deal partners and buying preferred stock in Yahoo. The software giant has been in discussions about a potential joint proposal for Yahoo with private-equity firm Silver Lake Partners and the Canada Pension Plan Investment Board.
Microsoft is not seeking full ownership of Yahoo, but rather acting in effect as a financier partly in exchange for being able to retain some influence over Yahoo’s future.
Among other potential bidders is China-based Alibaba Group, which is now partly owned by Yahoo! and Russia’s Digital Sky Technologies. Even though there are no concrete statements from either of the companies involved, the mere rumor of Google considering the bid caused Yahoo’s stocks to jump by 3%. Perhaps a buyout by Google would be a good thing for the company?
What do you think? Should Google buy Yahoo? Feel free to share your thoughts below.