Could! Yahoo! be! sold! to! private! buyers?

Rumours of firm leaving public market to recover in peace

Yahoo! co-founder and former CEO Jerry Yang wants to take the ailing web company out of the stock market in a deal with private equity firms, if the latest speculation on the firm's future is to be believed.

People close to the inner mechanisms of Yahoo! have been doing their thing with Reuters, whispering to the newswire that Yang fancies the idea of going back to private investment while hanging on to his 3.63 per cent stake.

Since firing Carol Bartz from the chief exec seat in September, Yahoo! has been working with advisers Allen & Co and Goldman Sachs on a "strategic review", which speculators have taken to mean some form of sale of the company or at least some of its assets.

And despite its flagging fortunes, there are a number of suitors willing to snap up the former internet darling.

Last week, Jack Ma, boss of Alibaba, told a gathering of people at Stanford University that his company would be "very interested in Yahoo!", according to Reuters.

Yahoo! is currently holding a 35 per cent stake in Alibaba, which Ma would likely be chuffed to get back; the partnership between the two companies has soured since Yahoo! first came on board at the Chinese e-commerce firm in 2005.

The bone of contention lay in Alibaba's spinoff of its PayPal-ish service AliPay in August 2010, a move Yahoo! said it didn't know about, although Alibaba said it did. The row was settled in July this year, but Ma may still be looking for a way to come out from under Yahoo!'s watchful eye.

A report from Bloomberg said Ma was also considering taking on some partners for his bid, with names like private equity firm Silver Lake and Russian internet company Digital Sky knocking about.

And of course, Yahoo!'s long-time suitor Microsoft is reportedly still keen on consummating its interest, despite being rejected in 2008. Back then, Yang was instrumental in turning down what in retrospect was a pretty nice deal for the company, at $33 a share, considering stocks today are worth less than half that price.

As Microsoft well knows, the public markets can be quite brutal, generally wanting internet and technology companies to grow and grow and then grow some more. And that's a strong motivator for Yang to take Yahoo! private, because it would give the business a chance to lick its wounds and make the kind of streamlining decisions the stock exchange expects.

Yahoo!'s advisers were expected to send out financial information this week to interested parties, according to Reuters' source, while another contact said all the talks were still informal so far and no real negotiations had started yet.

A Yahoo! spokesperson told The Register that all the reports so far were rumours and speculation, and it wouldn't comment on them, but confirmed that the strategic review with its advisers was still ongoing. ®

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