Microsoft 'considering Yahoo! compromise'

19th May 2008

Software giant Microsoft has started up talks with Yahoo! over a potential joint venture, new reports suggest.

The company revealed this weekend that it was considering alternatives to a full takeover, after the collapse of discussions between the firms two weeks ago.

However, Reuters reports that billionaire investor Carl Icahn, who was to lead a proxy takeover of Yahoo! in order to achieve a Microsoft acquisition, may not be happy with anything less than a total takeover.

A source familiar with Mr Icahn's thinking told the news provider: "He does not want to see Yahoo pushed into some joint venture with Microsoft and is not going to be used to push Yahoo into it."

Microsoft walked away from Yahoo! several weeks ago after an acquisition price agreement could not be reached between the two companies.

Since takeover talks ceased, shareholders on both sides have criticised the way the deal was handled.