Yahoo may consider Google alliance, source says

By Eric Auchard

Feb 3, Reuters

SAN FRANCISCO - Yahoo Inc would consider a business alliance with Google Inc as one way to rebuff a $44.6 billion takeover proposal by Microsoft, a source familiar with Yahoo's strategy said on Sunday.

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. At $31 a share, Yahoo believes the bid undervalues the company, two sources said.

A second source close to Yahoo said it had received a procession of preliminary contacts by media, technology, telephone and financial companies. But the source said they were unaware whether any alternative bid was in the offing.

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photo: A Google search page is seen through the spectacles of a computer user in Leicester, central England July 20, 2007. Google Inc fired back on Sunday at Microsoft Corp's $44.6 billion bid to acquire Yahoo Inc, accusing Microsoft of seeking to extend its computer software monopoly deeper into the Internet realm (REUTERS/Darren Staples)