Microsoft has reportedly been in talks with "a number of leveraged buyout firms" for "billions of dollars" in financing as part of a consortium of investors led by Silver Lake and the Canadian Pension Plan Investment Board. In this scenario, Microsoft could expand its current deal with the company beyond its Bing search engine and integrate its recent acquisition, Skype.
Google, on the other hand, has reportedly held initial conversations with two private equity firms. The deal could allow Google to take over Yahoo's search business when its partnership with Microsoft ends, as well as promote offerings like its social network Google Plus.
California-based Yahoo posted a US$293mn net profit in the third quarter of 2011, down 26% compared to the year-ago period. Yahoo's revenues reached US$1.22bn in the quarter, a 24% decline compared to 3Q10.