Thaindian News

New York, June 14 (IANS) The final offer Microsoft made to Yahoo! this week which the beleaguered Internet search company spurned again would have given it $9 billion in cash and $1 billion a year in revenue sharing. Microsoft had offered $8 billion for a 16 percent stake in Yahoo! and $1 billion for its search business, Kevin Johnson, a key member of Microsoft’s negotiating team, said in a letter to company employees Friday.

The botched deal, before Yahoo! signed an advertising agreement with Google Thursday, also included revenue-sharing that would have given Yahoo! an additional operating income of $1 billion a year.

The latest proposal from Microsoft was an alternative to its original unsolicited offer Feb 1 for full acquisition of Yahoo!, valued at $44.6 billion then, and a revised offer May 3 for around $50 billion. Yahoo! declined rejected on both occasions, saying the offers undervalued the company.

Microsoft, which dominates the software industry but has lagged in online search advertising, is said to be still open to discussing its alternative proposal despite Yahoo!’s partnership with Google.

Yahoo! agreed to let Google sell ads next to its search results in a deal, which according to the former, would boost cash flow by $250 million to $450 million in the first 12 months.

Wall Street analysts have derided the deal with Google.

“With the collapse of the Microsoft deal, Yahoo! employees lost (in addition to shareholders), and we expect Yahoo!’s employee turnover to accelerate as its share price falls,” wrote Laura Martin of Soleil Securities Group.

News that three senior Yahoo! executives had resigned broke just as the alliance with Google made headlines.

Yahoo! closed Friday at $23.47, down five cents, for a total value of about $32 billion.