SAN FRANCISCO (Reuters) - Talks between Yahoo Inc and Microsoft Corp are focused on arriving at a value for Yahoo’s search business and these discussions are likely to conclude in the “next week or so,” a person familiar with the matter said on Wednesday.
The two sides are currently discussing the terms of a potential deal in which Microsoft buys Yahoo’s search business, the source told Reuters.
Last month, Microsoft said it renewed talks with Yahoo about an alternative deal after withdrawing its $47.5 billion offer for the Internet company.
Microsoft’s alternative proposal to Yahoo involves buying Yahoo’s search business and taking a minority stake in what remains of the company after Yahoo sells off its Asian assets, another source told Reuters earlier.
Microsoft has declined to comment and Yahoo was not immediately available.
Executives and advisers from both companies have since continued discussions within this framework, but the focus is on establishing a price for Yahoo’s search, the person said.
No final dollar value has been put on the table for Yahoo’s search business because any amount would be tied to how revenue-sharing and other deal terms are structured, said the person, who was not authorized to speak on the record given the confidential nature of negotiations.
Some of the finer points under discussion include what Microsoft would pay Yahoo for search queries and traffic acquisition costs, the source said.
Yahoo may seek guarantees on the rate Microsoft is willing to pay and a specific time commitment for those rates, the person said.
Separately, Yahoo continues to talk with Google Inc and could still end up striking a deal with the search giant if it fails to agree on deal terms with Microsoft, the source said.
Under such a deal, Yahoo would display advertisements from Google alongside its search results.
Editing by Gary Hill and Andre Grenon