Microsoft revives Yahoo acquisition plan, says report

Mumbai: Microsoft Corporation, which is in hot pursuit of Yahoo Inc, has asked the latter to start formal talks for a takeover deal, a New York Post web site report quoted sources as saying.

Reports put the value of the deal roughly at $50 billion.

While the two have held informal talks over a possible deal over the years, the latest move signals a new urgency on Microsoft''s part, the report said.

Microsoft made a move to buy Yahoo a few months ago, but Yahoo spurned the advances, the report said.

The acquisition of search engine operator Yahoo Inc could help Microsoft better compete with web search leader Google Inc.

The Wall Street Journal said officials of the two companies are looking at a merger or some other kind of match-up and said the talks appear to be early-stage discussions.

Microsoft is feeling increasing pressure to compete with Google, which plans to beef up its portfolio with a $3.1 billion purchase of online advertising company DoubleClick Inc.

Microsoft currently trails both Yahoo and Google in the lucrative web search business.

Micrsoft had lost an AOL advertising deal to Google in 2005. In addition, Google is developing Web-based software that directly competes with Microsoft Office.

Earlier this week, Yahoo had said it would buy 80 per cent of advertising exchange Right Media for $680 million, increasing its stake in that company to full control.

Yahoo shares surged $5, or 17.7 per cent, to $33.18 in pre-market trading, while shares of Microsoft fell 28 cents to $30.69.