Microsoft signs Yahoo's non-disclosure, stokes acquisition fire

Microsoft has signed a non-disclosure agreement with Yahoo, according to a source briefed on the matter, which could pave the way for the Redmond giant in buying the dwindling Internet search portal, reveals the New York Times.

In doing so, Microsoft will be allowed to inspect Yahoo's books at a closer level as it joins other private equity firms in the exclusive party.

Though Microsoft would not be a far off bet to bail out the struggling company, Microsoft recently reportedly held talks with potential partners to mount a bid for the company. Such a 'care-package' could see Microsoft investing billions into a coalition led by Silver Lake -- the same company that helped Microsoft buy Skype -- along with bank financing backing with an additional few billion dollars on hand.

This is far from being the first time rumours have surfaced that Microsoft could buy out Yahoo, as it continues to struggle.

Microsoft has stakes in Yahoo as far as its interest goes, particularly centering around advertisement revenue of its joint Bing and Yahoo search combination. While Microsoft's Bing returns search results, Yahoo shows corresponding advertisements against those results.

It's not the only connection between the two companies, however. Going as far back as allowing then MSN Messenger into Yahoo Messenger contacts' lists, paved the way forward for greater sharing and collaboration. Considering tens of millions still use Yahoo for instant messaging and web email services, it would not be an unlikely move to see Microsoft's recent acquisition of Skype enter the fold somehow.

But whether a Microsoft-Yahoo connection could work is another question altogether. It just so happens that Larry Dignan has that covered.

Though since July, when Yahoo's shares were at one of its lowest points of just over $11 a share, it has managed to climb back in the last quarter back to $14.87 a share as of today. Shortly before its calamitous plunge, it was at highs of nearly $19 per share.

Related:

• Microhoo 2? Microsoft reportedly eyes Yahoo bid
• Facebook, Google eye Skype deal: Consumer vs. corporate tug of war
• Mary Jo Foley: Skype adds Facebook integration, loses several top execs