More players interject Yahoo-Microsoft concern

Yahoo Inc., after dodging Microsoft Corp.’s takeover bid for a few months is now finding an alternate suitor in Time Warner Inc.'s AOL unit.

Yahoo turned down Microsoft’s $44.6 billion, $31-a-share bid, demanding a higher price. Microsoft however, saw no reason to raise the bid since there were no competitors but with AOL’s involvement in the deal, Yahoo can be more positive.

A Yahoo-AOL deal could prompt Microsoft to raise its offer - a move that the software giant has evaded since announcing its unsolicited cash-stock offer back on Feb. 1, which was initially valued at $31 a share, but now stands at $29.24 due to fall in Microsoft’s share value.

Over the weekend, Microsoft had issued a three week deadline to Yahoo to decide upon its offer or else the software giant will directly approach the shareholders. Yahoo remained adamant and asked for a higher bid.

Another player in the ongoing deal-making talks is Rupert Murdoch’s News Corp. which is considering making a joint bid with Microsoft for Yahoo.

The Wall Street Journal reported on Thursday that Sunnyvale-based Yahoo may incorporate AOL's $10 billion unit while getting cash infusion from Time Warner that could give it a 10 percent stake in the joined entity.

It could then buy billions of dollars of its own stock at $30 to $40 a share -- higher than Microsoft's $44.6 billion, $31-a-share bid, the Journal reported.

Teri Everett, a spokeswoman for New York-based News Corp., refused to disclose anything saying that the company doesn't comment on “speculation.” Time Warner spokesman Ed Adler also, declined to comment.

Yahoo went up 54 cents, or 1.9 percent, to $28.31 at 9:40 a.m. New York time in trading on the NASDAQ Stock Market. Microsoft remained steady at $28.89, valuing its offer at about $29.24 a share.