According to the Wall Street Journal Google Inc. has been in discussions with least two private equity firms about potentially helping them finance a deal to buy Yahoo’s core business. Google’s interest is to sell advertising across Yahoo’s websites and give Google access Yahoo’s audience of nearly 700 million users. A spokesperson for Google declined comment.
According to the WSJ other possible Yahoo bidders are the Alibaba Group, a China-based Internet firm, in which Yahoo has a 43 percent stake, and Microsoft, which is looking at extending loans to potential deal partners Silver Lake Partners, a private equity firm, and the Canada Pension Plan Investment Board.
Yahoo has been in a state of chaos since it fired former CEO Carol Bartz
in early September. The company retained investment banking firm Allen & Co to help conduct a “strategic review” of its business and is reportedly working with executive search firm Heidrick & Struggles to find a new CEO.
Any potential deal between the two biggest Internet companies would likely arouse antitrust scrutiny. Google is already under regulatory scrutiny from governments around the world. Greg Sterling, an analyst at Opus Research in San Francisco, told Bloomberg: “If competition dissipates or diminishes, then the hand of regulators is strengthened. If competition is diminished or marginalised, then all the arguments about Google being a monopoly ring more true.”
The US Federal Trade Commission has recently started a review Google’s business practices. The European Union and the state of Texas have also begun investigations of the company’s leadership in search and advertising markets.
Yahoo’s current market value is estimated at just over $20 billion