Microsoft Corp is considering a bid for Yahoo Inc, resurfacing as a potential buyer after a bitter and unsuccessful fight to take over the Internet company in 2008, sources close to the situation said on Wednesday.
Microsoft joins a host of other companies looking at Yahoo, which has a market value of about $20 billion and is readying financial pitch books for potential buyers, they said.
Those companies include buyout shops Providence Equity Partners, Hellman & Friedman and Silver Lake Partners, as well as Chinese e-commerce giant Alibaba and Russian technology investment firm DST Global, the sources said.
Microsoft may seek a partner to go after Yahoo, one of the sources said.
No decision has been made and a bid may not materialise as there are internal divisions at the software company on whether it should pursue Yahoo again, a high-ranking Microsoft executive said.
One camp inside Microsoft is hot for the deal, believing that it would obliterate AOL Inc as a competitor and create a strong Web portal that can offer better products to audiences, advertisers and end users, the executive said.
However, another camp is against the deal, feeling that if Microsoft is going to invest billions of dollars in an acquisition it should be one that has more growth potential. Microsoft last tried buying Yahoo in 2008, offering to pay as much as $47.5 billion, or $33 per share.
"Yahoo's value hasn't grown in years, and some executives feel we should buy something that is more forward-looking," said the executive, who spoke on condition of anonymity.
Yahoo, Microsoft and the other potential buyers declined to comment.
Any auction process for Yahoo is still in the early stages, and the company's financial advisers -Goldman Sachs and Allen & Co - are preparing to send financial information to potential bidders, sources have said previously.