Monday, May 19, 2008


SUNDAY • MAY 18, 2008


Microsoft Corp said today it has reached out to Yahoo Inc. about an alternative deal that would not involve a full acquisition, in a move that could save the web pioneer from fighting a proxy battle with financier Carl Icahn.

Microsoft said it was not proposing to make a new bid to buy all of Yahoo "but reserves the right to reconsider that alternative" depending on discussions with Yahoo, shareholders of Yahoo or Microsoft, or other third parties.

Icahn launched a campaign Thursday to replace Yahoo's board with directors who would reopen talks with Microsoft.

A source familiar with Microsoft told Reuters that Microsoft had not held discussions with Icahn about Yahoo.

Microsoft did not disclose the nature of its contact with Yahoo in a short statement it issued "in light of developments" since the company withdrew its Yahoo bid two weeks ago.

The company had said repeatedly that it had moved on, but the statement said the two sides had been in contact again.

Microsoft emphasized that a deal might or might not result.

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