Yahoo plans alternatives as board weighs Microsoft offer

Mumbai: Yahoo Inc board is plotting a rescue plan for itself even as its board is set to discuss Microsoft's $44.6 billion take-over offer next week.

Blog reports said the Yahoo board members have already discussed the bid by phone on Friday and are expected to meet next Wednesday at Yahoo headquarters in Sunnyvale, California.
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While Yahoo spokesperson said the company was still "carefully and thoroughly evaluating" the Microsoft offer, market sources said the Sunnyvale portal may make a deal with rival Google for outsourcing its search engine advertising business to Google Inc.

The Yahoo spokeswoman would not, however, say when its directors plan to meet. She declined to comment on reports of a Wednesday meeting, citing policy.

Some advisers have urged Yahoo to accept the Microsoft deal, but some senior executives of the company want to keep options open for an alternative tie-up with web search leader Google.

The alternative plan is to spin off its search ad business, along with the related sales and technical staff, and adopt Google as an ad supplier. The two companies would then share the revenue. Such a deal could significantly reduce costs and increase cash flow for Yahoo.

Analysts still expect an `Yes' to Microsoft offer although Yahoo would try to get a higher price. They believe that Microsoft could be persuaded to raise its bid to make it easier for Yahoo co-founder and CEO Jerry Yang and his board to accept it.

Separately, a major investor in Yahoo - Capital Research and Management, which owns 6 per cent in Yahoo - met with Microsoft CEO Steve Ballmer to see if he would be willing to raise the offer, the New York Post reported.

Microsoft is pursuing the Yahoo bid to take on Google Inc, the world's top internet search engine.