As part of Microsoft's last bid to acquire Yahoo's search business, it was willing to pay the search giant $1 billion in cash and also structure a deal that would have brought Yahoo $1 billion in operating income per year, a source told CNET News.com on Friday, confirming details reported earlier in the day by Reuters.
That deal would have seen Microsoft taking on the operations of the search business as well as its research costs, according to another source. In addition, Microsoft was willing to guarantee Yahoo better monetization than Yahoo gets from its Panama engine, that source said.
That was on top of another component of the deal, in which Microsoft would have paid $8 billion to acquire a 16 percent stake in Yahoo at $35 per share, sources said.
It's all part of an offer that Microsoft has said would have offered Yahoo shareholders more than $33 a share, though I'm still not totally clear on how that math works and whether it counts on Yahoo selling some of its Asian assets.
I can only imagine that all of these details are making steam come out of Carl Icahn's ears. The billionaire investor is now left either taking a loss on Yahoo or becoming a long-term shareholder. And that's not to mention the palpable frustration of those who were already long-term Yahoo investors.