[Update: Marriage plans have been scribbed for now, but the happy couple amicably announced plans to "live together" before entering into a larger commitment. What that suggests is some sort of strategic partnership to challenge Google's hegemony. The bridal registry is temporarily closed! Note: Yahoo CEO Terry Semel happens to be speaking at a Microsoft online advertising conference in Redmond this coming week. Semel has actually spoken at the same event in the past, but maybe this time he'll have something more interesting to discuss than general industry trends.]
Microsoft is resuming its pursuit of search-engine operator Yahoo! that could help it better compete with Web search leader Google, published reports said today.
Yahoo! shares surged about 17 percent in midday trading in New York.
The New York Post reported today that Microsoft has asked Yahoo! to enter formal negotiations for an acquisition that could be worth $50 billion. Yahoo!’s market capitalization was about $38 billion on Thursday.
Microsoft had no immediate comment on the report, spokesman Lou Gellos said today.
The Wall Street Journal said executives of the two companies are looking at a merger or some other kind of matchup and said the talks appear to be early-stage discussions. It said the companies explored the idea of combining last year, but the talks led nowhere.
The newspaper reports each cited unidentified people familiar with the situation.
Industry analyst Matt Rosoff with Directions on Microsoft in Kirkland said a huge takeover is unlikely, noting that it would duplicate services MSN already provides, such as instant messaging and e-mail.
It is possible, Rosoff added, that Microsoft and Yahoo! might be talking about a deal involving only online search advertising.
Microsoft is feeling increasing pressure to compete with Google, which plans to beef up its portfolio with a $3.1 billion purchase of online advertising company DoubleClick.
Earlier this week, Yahoo! said it would buy 80 percent of advertising exchange Right Media for $680 million, increasing its stake in that company to full control.
Yahoo! shares were up $4.81, or 17.1 percent, to $32.99 in midday trading in New York, while shares of Microsoft were down 46 cents, or 1.5 percent, at $30.51.
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