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UPDATED: Microsoft Offering $20 Billion for Yahoo Search?

Just days after Microsoft CEO Steve Ballmer's declaration that Redmond was "done with all of these [acquisition] discussions with Yahoo," one newspaper is reporting that a deal is in the works.

According to a report published Saturday by the Times of London, Microsoft and Yahoo have agreed to "the broad terms" of a deal that would give Microsoft Yahoo's search business for $20 billion. Reporter John Waples described the deal as "complex": Microsoft would have a "10-year operating agreement" for Yahoo search, would participate in the company's management structure and acquire 30 percent of Yahoo overall.

Neither company has commented publicly on the report as of press time. However, All Things D's Kara Swisher reported on Sunday that her sources from both companies "scoffed" at the article, saying that the companies haven't even been talking.

If the Times report is true, the timing may make sense: Yahoo's CEO, Jerry Yang, recently announced he would leave the company. Shareholders who sued Yahoo after the negotiations earlier this year failed blamed Yang in court documents for not accepting Microsoft's original offer of $31 a share made in February. Yang stated at the time that he wanted an amount in the high $30s. Microsoft's follow-up attempt to acquire just the search portion of Yahoo failed over the summer -- and was the first of many times Ballmer said he would no longer seek to acquire any part of the company.

Yahoo's value has dropped precipitously during the last year: It was in the mid-$20s per share right before the original Microsoft offer; it closed Friday at $11.51 a share.

About the Author

Becky Nagel is the vice president of Web & Digital Strategy for 1105's Converge360 Group, where she oversees the front-end Web team and deals with all aspects of digital strategy. She also serves as executive editor of the group's media Web sites, and you'll even find her byline on PureAI.com, the group's newest site for enterprise developers working with AI. She recently gave a talk at a leading technical publishers conference about how changes in Web technology may impact publishers' bottom lines. Follow her on twitter @beckynagel.

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