Google May Assist With Financing Yahoo Buyout: Report

Google Inc. (Nasdaq: GOOG) has reached out to two unnamed private equity firms to potentially assist them in financing a transaction to acquire Yahoo! Inc. (Nasdaq: YHOO), according to a report in The Wall Street Journal Saturday

Google has reportedly only had preliminary talks and may eventually end up backing down from any such bid, the report cautioned.

The Journal noted that Google is intrigued by the possibility of selling ads across Yahoo’s network of Web sites -- although any potential combination of the two search engine companies would likely attract the attention of antitrust legislators.

Separately, Microsoft Corp. (which was infamously rebuffed in its takeover attempt for Yahoo several years ago) is also pondering financing a portion of a takeover bid for Yahoo by private equity investors.

Since firing chief executive Carol Bartz almost two months ago, Yahoo has been seeking to sell either parts of the company or the entire entity. The company is reportedly fielding offers from multiple parties and has hired the boutique investment bank Allen & Co. to evaluate such proposals in order to maximize shareholder value.

Yahoo is also reportedly working with Heidrick & Struggles, an executive search firm, to find a new chief executive.

Robert Phillips, managing principal at Spectrum Management in Indianapolis, told International Business Times that Yahoo’s most attractive assets are its stakes in the fast-growing Yahoo Japan (35-percent owned by Yahoo), the dominant search company in Japan; and China-based Internet firm Alibaba Group (43 percent-owned by Yahoo).

Although its U.S. business is relatively flat, Yahoo still remains the second most popular search engine (behind the behemoth that is Google) with about 16 percent of the market; and it also delivers solidly growing display advertising revenues.

Yahoo shares have essentially been flat year to date.