A source familiar with Yahoo Incorporated’s strategy suggested that the company may consider a business alliance with Google Incorporated, as an alternative to Microsoft’s $44.6 billion takeover proposal. Yahoo management is considering revisiting talks it held with Google several months ago on an alliance as an alternative to Microsoft’s bid, that source said. The Wall Street Journal is reporting that Google’s chief executive Eric Schmidt called Yahoo’s chief executive Jerry Yang to offer his company’s help in any effort to thwart Microsoft’s bid. Details of what conclusions the two men came to have yet to surface.

At $31 a share, Yahoo believes the bid undervalues the company, two sources said. In other words, it is quite possible that Yahoo’s efforts to find an alternative bidder could simply be a measure to pressure Microsoft to boost its bid. At the end of the day though, there is still no information of an alternative bid being placed, be it from Google, News Corporation or yet another company. I’ll try to stay on top of things as more information becomes available.

Source : Reuters