Microsoft Seeking to Buy Yahoo

by Steve Goldstein

LONDON (Dow Jones) -- Yahoo shares rallied 14% in overseas trading on Friday after a newspaper report that Microsoft may try to buy the Internet search firm after being beaten to other deals by Google Inc.

Shares of Yahoo (YHOO) jumped 14% to $32.22 in Frankfurt on volume of over 110,000, which by German standards is extremely high for a U.S. stock.

The gains came after The New York Post reported that Microsoft (MSFT) may want to buy the firm in what could be a $50 billion deal.

Citing anonymous sources, The Post said Microsoft is intensifying its pursuit of Yahoo and has requested formal talks. In recent weeks, Google bought DoubleClick for $3.1 billion and in 2005 renewed a key search-advertising pact with AOL.

The Post also reported that Yahoo two months ago spurned a bid from the Redmond, Wash.-based software giant.

According to the report, a deal between Microsoft and Yahoo would lift their combined share of the search advertising market to 27% against Google's (GOOG) 65%.

(END) Dow Jones Newswires

05-04-07 0556ET

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