Microsoft Corp has stepped up its pursuit of a deal to buy Yahoo Inc, two newspapers reported on Friday, as the two companies re-enter talks to strike a deal and fend off a common competitor in Web search leader Google Inc Yahoo shares jumped 17.96 percent to $33.24 in Nasdaq trading on Friday, while Microsoft shares fell 1.26 percent to $30.58.
The two companies have held informal talks over the years, but the latest approach comes as Microsoft seeks a deal to counter Google's rapid growth. "It's been talked about for a long time, ever since Google came into the picture. I can't imagine a more perfect deal," said Peter Lobravico, vice president of risk arbitrage sales/trading at brokerage Wall Street Access.
Analysts often dismiss a take-over of Yahoo by Microsoft since the two companies have such different cultures and Microsoft usually prefers to buy small companies with interesting technology. The New York Post reported early on Friday that Microsoft made an offer to buy Yahoo a few months ago, but Yahoo spurned the advances. The paper, putting a price tag of $50 billion on a Yahoo take-over, said that discussions continue between the two companies.
Microsoft and Yahoo declined to comment on the reports. Investment bank Goldman Sachs is advising on the process, the paper said. The bank declined to comment. One banking source said that investment banks had been pitching Microsoft on the idea of buying Yahoo for months.
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