While Microsoft has been in discussions with News Corp about putting in a joint bid for Yahoo, people close to Microsoft are saying that the software company still plans to go after Yahoo on its own, the Wall Street Journal reported.
In addition, the Yahoo board of directors failed to reach any decisions after meeting on Friday to discuss the path the company should take, the Journal said.
Microsoft and News Corp which is owns Dow Jones, publisher of the Wall Street Journal (WSJ), declined to comment.
According to the WSJ report, advisers to Yahoo gave the directors their opinions of thier options, which include negotiations with the Time Warner AOL unit and Google, or talking with Microsoft about its unsolicited takeover bid. Both Yahoo and AOL declined comment.
People familiar with the matter said that Time Warner had been expecting the Yahoo board to move closer to supporting a deal with AOL. That the board took no action might mean the directors are hesitant about merging with AOL. However, one person said that Time Warner is continuing its discussions with Yahoo.
That deal calls for Time Warner to fold AOL into Yahoo then make a cash contribution in return for a 20 per cent equity stake. Under the deal, AOL would be valued at about US$10 billion, excluding the AOL dial-up internet-access business.
Yahoo has also been talking with Google. Last week the two companies announced a two-week test in which Yahoo will deliver relevant web advertising from Google alongside its own search results. Yahoo and Google are looking into a more extensive search-advertising deal, although antitrust experts say such a deal would not pass regulatory muster.
Meanwhile, Microsoft CEO Steve Ballmer saidYahoo had three weeks to accept its $42 billion takeover offer or it would face a battle to replace its board and possibly a lower offer.
Yahoo responded that it was open to considering a Microsoft takeover, but it wanted a higher offer. In February, Yahoo rejected the initial Microsoft unsolicited $44.6 billion stock-and-cash offer, saying that it undervalued the company. The deal is now worth about $42 billion because of a drop in Microsoft share price.