Yahoo search deal boost as big as a bread box?

How much better is better?

While Microsoft and Carl Icahn's joint-proposal was rejected by Yahoo on Saturday, some components of the transaction remained the same and others were given growth hormones, according to sources familiar with the companies.

Under the sweetened offer to buy just Yahoo's search business, one thing that remained unchanged was the $1 billion payment for Yahoo's search business and the $8 billion preferred equity investment the software giant was willing to pony up as part of its initial search proposal last month, said one source close to the company.

"That remained the same but different components (of the offer) are larger," the source added.

Another source characterized the improvements made to the sweetened offer as "substantial." But, obviously, the deal was not sweet enough to land a Yahoo deal.

Meanwhile, Microsoft reportedly increased its guaranteed annual payment from search advertising revenues to five years, compared with its initial offer of a three-year guarantee, according to a report in The Wall Street Journal

Under this proposal, Yahoo would receive an annual payment of $2.3 billion for five years and, in the following five years, a minimum annual payment of $1.6 billion, according to the Journal.

Microsoft's proposal also reportedly included the software giant acquiring $3.9 billion of the Internet pioneer's stock, the Journal reported.

It has yet to be seen whether Yahoo will update its shareholder presentation materials to reflect the sweetened Microsoft bid, as the search pioneer makes its rounds with investors and institutional investor advisory services, heading into its August 1 shareholders meeting.

Here's its assessment of Microsoft's initial search-only, or "hybrid," deal that it proposed last month for comparison purposes (click on the images for a larger view):

Click image for enlarged view.

Click image for enlarged view.

While Microsoft got a no dice to its initial search-only deal, and again received a nope with its joint Icahn proposal for a search-only deal, the software giant has shown perseverance.

So, will it take this latest rejection to retool yet another sweeter bid to throw back over the fence at Yahoo, before the Sunday sun sets over the Pacific and the markets open Monday with investors reaction to the weekend's events?

[Sugiarto Setiabudi]

Carl Icahn and Microsoft sould do cease and desist of illegal hostile take over

[Sumatra-Bosch]

Typically Microsoft. Destroy everything. Pay nothing. More squander and wander management by the Boy Fuhrer from Duncan Hines.

[jumpydodrop]

Dang that is a LOT of money. I am surprised Google doesnt suck them up afteralll, Google is going to take over the world one day! LOL

JT
http://www.FireMe.To/udi

[rickdev]

Well, DOJ would never allow Google to "suck them up" due to them owning search already. I think Yahoo, if you like Microsoft or Icahn or if you hate them, is feeling the pressure and are worried about their shareholders having enough of them rejecting deals that could increase their value. Do I think MS should buy them, no, I think they should improve their own product and compete in the market, allow Yahoo to do the same. But I do feel that Yahoo needs to change their management, and get people in there that can change the company around. Yang does not appear to have the ability.