Microsoft's bid cost Yahoo $79 million

Yahoo spent $79 million on advice concerning its potential takeover by Microsoft and failed partnership with Google.

The internet company spent much of last year fending off takeover bids from Microsoft. So desperate was the company not to fall into Microsoft's clutches that it struck a search advertising deal with Google, only to see Google withdraw once US competition authorities started scrutinising the partnership.

Now Yahoo's filing to the US Securities and Exchange Commission reveals the true cost of the failed deals.

The filing stated the company spent "$79 million for 2008 for outside advisors related to Microsoft's proposals to acquire all or a part of the company, other strategic alternatives, including the Google agreement, the proxy contest, and related litigation defence costs".

The deal, in fact, cost the company much more than $79 million. Not only is the company's share price dawdling at less than half the value it was this time last year, but chief executive Jerry Yang fell on his sword for his steadfast refusal to sell to Microsoft.

New Yahoo boss Carol Bartz has also played down the chances of selling the entire company to Microsoft. However, she hasn't ruled out the possibility of striking a search partnership with Redmond.

"It's premature to discuss our strategic options," claimed a Q&A document distributed by Yahoo management last week, following the company's restructuring. "For the time being, nothing is off the table and creating shareholder value is our first priority."

Click here to read our timeline of Microsoft's attempted takeover of Yahoo.

Barry Collins

Barry Collins is an experienced IT journalist who specialises in Windows, Mac, broadband and more. He's a former editor of PC Pro magazine, and has contributed to many national newspapers, magazines and websites in a career that has spanned over 20 years. You may have seen Barry as a tech pundit on television and radio, including BBC Newsnight, the Chris Evans Show and ITN News at Ten.