Microsoft's last offer to Yahoo

Software maker was willing to buy Yahoo's search business and offered to buy a 16 percent stake at $35 a share--above the price Microsoft offered when it was trying to get all of Yahoo.

Microsoft said in its statement Thursday that it was offering Yahoo a deal worth even more than its original $33 a share offer for the whole company. That appears to be the case, according to details confirmed by those familiar with the offer.

In addition to offering to buy Yahoo's search business, Microsoft was willing to acquire a 16 percent stake in Yahoo at $35 a share, according to a source familiar with the company's offer.

This time, though, it appeared it was Yahoo that wanted Microsoft to buy the whole company, an option that the company refused to revisit, according to a separate source. Yahoo and Microsoft executives met on June 8 at Mineta San Jose International Airport, at which time Yahoo says it was told unequivocally that Microsoft would not resume its buyout bid, though it was interested in a deal for Yahoo's search business.

Yahoo decided its search business was too strategic, even though later in the day Thursday it agreed to allow Google to serve up a good chunk of the company's search related advertising .

"With respect to an acquisition of Yahoo's search business alone that Microsoft had proposed, Yahoo's board of directors has determined, after careful evaluation, that such a transaction would not be consistent with the company's view of the converging search and display marketplaces, would leave the company without an independent search business that it views as critical to its strategic future, and would not be in the best interests of Yahoo stockholders," Yahoo said in its statement saying talks with Microsoft had ended .

An unconfirmed rumor says that one or more Yahoo directors are upset at the latest turn of events and may seek to bail. Anyone know if that's true? Feel free to whisper it in my ear at Ina DOT Fried AT CNET DOT com.

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About the author

    During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft. E-mail Ina.

     

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