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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

June 4, 2008 at 6:16 PM

Microsoft negotiating with Yahoo on price of search business, Reuters reports, conclusion expected in ‘next week or so’

Reuters, quoting anonymous sources, reports that negotiations between Microsoft and Yahoo on an alternative transaction are progressing and “are likely to conclude in the ‘next week or so.’ ”

On May 3, Microsoft withdrew its $47.5 billion offer to buy Yahoo outright. Two weeks later, the companies restarted talks about an undefined alternative transaction, which Microsoft proposed.

Various media reports, relying on anonymous sources, have described the contours of the alternative deal. The Reuters report says it would involve a Microsoft “purchase of Yahoo’s search business and taking a minority stake in what remains of the company after Yahoo sells off its Asian assets.”

Other details in the report:

— The sides are trying to put a price tag on Yahoo’s search business.

“No final dollar value has been put on the table for Yahoo’s search business because any amount would be tied to how revenue-sharing and other deal terms are structured, said the person, who was not authorized to speak on the record given the confidential nature of negotiations.

“Some of the finer points under discussion include what Microsoft would pay Yahoo for search queries and traffic acquisition costs, the source said.

“Yahoo may seek guarantees on the rate Microsoft is willing to pay and a specific time commitment for those rates, the person said.”

— Microsoft isn’t again offering to buy the whole enchilada.

— Yahoo still has an alternative search-advertising deal with Google on the back burner.

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