Sale Deal Urged On Yahoo

Yes, it’s the Yahoo – Microsoft story once more, which is beginning to seem like the neverending story. This time a big investor, Ivory Investment Management (IIM), which owns 1.5% of Yahoo, has sent a letter urging the company to pursue a deal to sell its search business to Microsoft.

In the letter, the Guardian reports that IIM managing partner Curtis Macnguyen wrote:

"We believe a search deal with Microsoft could deliver value to Yahoo shareholders of $24-$29 per share, or more than double yesterday’s closing price of $12.19."

"This deal would offer Microsoft the unique opportunity to immediately gain critical mass to better level the playing field with Google, while it would simultaneously allow Yahoo to both receive a sizeable up-front cash payment and increase its prospective cash flow."

Under the proposal suggested by IIM, Microsoft would be the search provider for all Yahoo services, but Yahoo would keep 80% of revenue generated by searches on its sites.

IIM claims the business could be worth $15 billion to Microsoft and give Yahoo an earnings boost of $500 million a year, while saving both companies money as they combined their search units.