Google is said to be mulling over a bid for rival Yahoo and examining finance options for a potential buyout of the troubled search giant, which holds around 15% share of the market compared to Google’s 65%.
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The search king is said to be in discussion with ‘at least’ two-private equity firms about funding for a buyout, reports The Wall Street Journal.
However, no formal proposal has yet been put together.
But the deal, if realised, would prove a major upset to rival Bing, owned by Microsoft, which currently has search partnerships with Yahoo, and attributed its success in part to the affiliation, boosting its share in US market to 14.7% – up 350 basis points year over year, Micrsoft said last week.
Latest comSCore search stats indicate Google sites accounted for 65.3%, while Yahoo No. 2 held 15.5% (a fall of 0.8%) of US searches in September, meaning Google would hold 70% of the search market if a takeover bid was successful.
However, any deal would have to be first approved by US regulators, which could prove more difficult for Google than getting the financing together – in 2008 antitrust lawyers blocked a business deal between the two engines from going ahead.
And the deal, said to be worth at least $20 billion, would also be a double blow to Seattle based Microsoft, who failed in a $47.5 billion bid to buy out the troubled search engine in 2008 and was recently thought to be considering a fresh takeover by extending loans to deal partners and buying stock in Yahoo, according to the Journal.
Yahoo, although plagued by shareholder discontent, management strife most recently with CEO Carol Batrz being ousted by the board, is still is the second most visited websites in the US with Yahoo! with 177.5m visitors compared to Google’s 183.4 m visitors in August, according to comScore, making it a valuable asset.
Chinese telecom giant Alibaba, which Yahoo currently owns a 40% stake in, was also linked to Yahoo takeover, with Chairman Jack Ma saying he is “very interested,” however, has made no formal bid as of yet.
Yahoo shares rose as much as 0.74% in after hours trading in the US following the Google buyout rumours.
