Microsoft guards its alliance with Yahoo

It looks as if Microsoft wants a seat at the negotiating table if Yahoo decides to sell part or all of its business. To gain better access, Microsoft Corp. has signed a nondisclosure agreement with Yahoo Inc., according to a person familiar with the situation. The person spoke to AP on Wednesday on condition of anonymity because the agreement hasn't been formally announced. The DealReporter and The New York Times earlier reported the arrangement between Microsoft and Yahoo. Yahoo's board has been mulling the company's options since firing CEO Carol Bartz in early September. The alternatives include selling Yahoo's Asian assets, such as the Alibaba Group in China, and auctioning off the company in its entirety instead of hiring a new CEO. Tim Morse, Yahoo's chief financial officer, has been interim CEO since Bartz's ouster. The DealReporter said that Yahoo's board is scheduled to meet this week to discuss its next step. Microsoft unsuccessfully tried to buy Yahoo in 2008 for as much as $47.5 billion (Dh174.5 billion) before walking away in frustration. Yahoo's stock is worth less than half of Microsoft's last offer of $33 per share. Yahoo shares fell 3 cents on Wednesday to close at $14.94. Microsoft's stock price dropped 32 cents to close at $24.47. Advertising alliance The New York Times reported that Microsoft is primarily interested in protecting its internet search advertising alliance with Yahoo if its partner pursues a sale or a dramatic reorganisation. Microsoft currently provides most of the search technology on Yahoo's website in return for 12 per cent of the ad revenue generated from the results. To preserve its business relationship with Yahoo, Microsoft already had explored contributing to a joint bid for Yahoo's US assets with some of the buyout firms that have been considering making offers. That list includes Silver Lake Partners, Providence Equity Partners and the Texas Pacific Group. Alibaba CEO Jack Ma has publicly acknowledged that his company would like to buy Yahoo, but that could be difficult because of US government concerns about a Chinese business owning a US company that handles e-mail and other electronic communications.