SEATTLE/NEW YORK - MICROSOFT Corp wants to stick with its original takeover offer for Yahoo, but is not ruling out News Corp joining its bid or other options, a source close to the company said on Friday.

Separately, a source familiar with the matter said that News Corp continues to talk directly with Yahoo on reaching a deal without Microsoft. The source declined to provide details on what a potential deal structure would look like.

The source close to Microsoft said that the company's preference all along has been to retain the original deal structure that would involve paying US$31 (S$42.38) per share in cash and stock to acquire Yahoo. But Microsoft has not ruled out bidding with partners.

The Journal also said that Yahoo's board of directors met on Friday to assess their options, including deepening their negotiations with Time Warner Inc's AOL on a deal to merge Yahoo and AOL, but that no decisions were reached.

The newspaper's Web site cited unnamed sources as saying that Time Warner had been expecting Yahoo's board to move closer to backing an AOL deal and that Yahoo's delays suggested that the company was hesitant to proceed.

A source familiar with the situation was unwilling to confirm the Journal's characterisation of Time Warner's thinking, but said that talks continue between Time Warner and Yahoo.

Microsoft had threatened last Saturday to launch a hostile bid for Yahoo and could lower its offer of US$42.4 billion around April 26 if it does not get a deal.

The New York Times reported on Wednesday that News Corp was in talks to join Microsoft's bid for the Web pioneer. Yahoo also announced on Wednesday a test to outsource Web search advertising to Google, which sources say is part of a three-way alliance that would combine Yahoo with Time Warner's AOL instead of Microsoft. -- REUTERS

Is this article useful to you?