Microsoft wooing Yahoo

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Redmond, Wash.—Microsoft Corp. has been courting Yahoo, and the two Internet powerhouses are talking merger, according to several published reports.

The two companies have reportedly had informal discussions in the past about various combinations, including the sale of a piece of Yahoo’s search business to Microsoft, but this latest courtship signals more urgency on Microsoft’s part in the face of increasing competition from Google, which recently agreed to buy DoubleClick for $3.1 billion.

According to a report in Friday’s New York Post, the merger talk comes on the heels of a bid Microsoft made to acquire Yahoo a few months ago—an offer declined at the time by Yahoo. Wall Street sources, according to the Post, estimate a price tag for Yahoo of about $50 billion.

The two companies together account for 27% of the search market, compared with Google’s 65% share.

—Carol Krol

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