Carl Icahn says he favors Yahoo-Microsoft search deal

Activist investor who played a central role in last year's acquisition negotiations between the companies says he wants to see a search partnership.

As finalization of a Microsoft-Yahoo search deal reportedly nears, activist investor Carl Icahn--who played a key role in trying to broker a broader partnership between the companies last year--is speaking out in favor of such an agreement.

"I've been a strong advocate of getting a search deal done with Microsoft," Icahn, who owns about 5 percent of Yahoo and sits on its board, told Reuters in a phone interview Friday. "It would enhance value if a deal got done, because of the synergies involved."

Icahn

According to an All Things Digital report late Thursday, several top Microsoft players--including online executives Yusuf Mehdi, Satya Nadella, and Qi Lu--are in Silicon Valley to try to finalize a search deal with Yahoo.

The report says the two sides are "down to the short strokes" after years of closely watched on-again, off-again talks. A deal could come within a week, All Things Digital said.

Icahn, for his part, wouldn't comment on where the latest supposed negotiations between Yahoo and Microsoft stand, according to Reuters. Icahn was a central figure in Microsoft's highly scrutinized $47.5 billion takeover bid for Yahoo, which fell apart last November.

During the negotiations, he launched a proxy fight in a bid to take over Yahoo's board. Among his wishes was that then-CEO Jerry Yang step down. The company and Icahn eventually reached an agreement that got him a seat on the board, and the number of seats was expanded, with Yahoo appointing two new members from Icahn's slate of candidates.

Since the full-out acquisition fell through, both Microsoft CEO Steve Ballmer and current Yahoo CEO Carol Bartz have indicated they are open to some sort of a search deal.

As my CNET News colleague Ina Fried pointed out, with Microsoft's Bing getting some good reviews and Microsoft having billions in cash on hand, the pieces would seem to be in place if both sides have the will to make it happen.

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