Report: Suitors in talks about possible Yahoo takeover

SAN FRANCISCO -- Is there a "For Sale" sign on Yahoo's front lawn?

The embattled Internet pioneer, which recently bounced CEO Carol Bartz amid tepid results, has been in talks with several potential suitors, including Silicon Valley venture firm Andreessen Horowitz and former News Corp. executive Peter Chernin, according to a report first published in The Wall Street Journal's blog All Things D.

USA TODAY could not independently confirm the talks. Yahoo declined to comment.

Power brokers with an interest in buying a piece of Yahoo have engaged in preliminary discussions with Yahoo Chairman Roy Bostock and company co-founder Jerry Yang, according to All Things D, which quoted several people close to the situation.

Yahoo faces increasing pressure to do something dramatic to reverse its flagging fortunes. Since it spurned Microsoft's $47.5 billion takeover bid in 2008, it hired — then fired — Bartz, while rivals Facebook and Google made gains in online advertising and innovation. Yahoo's stock has eroded since early May, to $14.89 from $18.65.

"The perception is that Yahoo is on the decline," says Sam Hamadeh, CEO of research firm PrivCo, which specializes in private companies. "Yahoo generates more profits than Facebook does. I think this is a classic takeover. I think it will probably happen, and there's no CEO in there to block it."

(Yahoo Chief Financial Officer Tim Morse is interim CEO.)

Hamadeh says Yahoo's voting structure would make it difficult to block a deal.

Yahoo's prospective buyers, all of whom are aligned with high-powered investors, underscore that Yahoo is an attractive acquisition target. It still commands a massive audience despite Google's dominance of the online ad market. Yahoo's various sites in August grabbed 177 million unique visitors, placing it No.2 behind Google's 183 million, according to researcher ComScore.

"Everyone smells blood right now and wants to see if there's something worth going after" at Yahoo, says Jordan Rohan, a financial analyst at Stifel Nicolaus who covers Yahoo. Microsoft might sense a bargain because it has an existing business relationship with Yahoo, Rohan says.

Microsoft struck an advertising deal with Yahoo after its acquisition offer got derailed. "They have a vested interest," Rohan says.