Round Two: Microsoft reportedly back in talks to acquire Yahoo

Although CEO Merissa Mayer is hopeful of turning Yahoo around through cost-cutting measures, there are renewed speculations that Micrsosoft is in talks with equity firms to buy Yahoo's core internet business.

According to Re/code, Microsoft would back bids to acquire Yahoo’s core Search business. Several employees are reportedly in talks with private equity firms interested in placing acquisition bids.

While the tech giant has not made any final commitments to investors and the talks are reportedly still in nascent stages, Peggy Johnson, head of Microsoft’s partnerships and acquisition strategy is believed to be involved in a sale that has attracted interest from major companies such as Verizon.

Microsoft’s initiative to financially back the Yahoo buy out bid falls in the line with its long awaited search and advertising agreements with the company, reported Reuters. Led by then CEO Steve Ballmerhad, it had attempted to acquire Yahoo for $45 billion less than a decade ago, in 2008. However, the deal did not work out.

However, the situation for Yahoo is now significantly different, with the company formally kickstarting the process of selling segments of its business in mid-February, while continuing the complicated process of wrapping up its operating businesses from Chinese internet giant, Alibaba.

“Separating our Alibaba stake from Yahoo's operating business is essential to maximising value for our shareholders,” Yahoo CEO Marissa Mayer had said.

Yahoo itself has also announced that its Board of Directors was exploring “strategic alternatives,” with a Strategic Review Committee of independent directors said to be in the process of tapping “potentially interested strategic and financial parties”.

According to industry experts, acquiring Yahoo Search might prove to be an important investment for Microsoft. The Yahoo acquisition might help Microsoft to keep its search engine Bing growing and alive, believes Andrew Frank, an analyst from Gartner, as reported by USA Today. The incredible number of users of Yahoo Search will place Bing in a better position to rival Google.