According to Michael Arrington at TechCrunch,
Interest in troubled Internet giant Yahoo has not waned, it just took a break for the holidays. A group of well known Silicon Valley executives and top investment bankers are putting together a Yahoo takeover deal that would be financed largely from debt supplied by Microsoft, we’ve learned from sources with knowledge of the proposed transaction.
Under the terms of the proposed deal, the investment group would make a takeover bid for Yahoo at a relatively low premium of around 20% to its current price of around $13 per share, valuing the company at just over $20 billion.
So what does Microsoft get out of the purported deal?
Simultaneous to the transaction Yahoo’s search and search marketing business would be sold to Microsoft under terms similar to what Microsoft proposed in June 2008 (and nothing like the bogus reports from The Times in November).
This would leave Yahoo as an independent entity, albeit one closely tied to Microsoft both financially and through the search and search marketing products.
Here are the November 2008 rumors and the June 2008 proposal which basically involved Yahoo’s entire search operation going to Microsoft in return for guaranteed monetization of searches coming through Yahoo.
You can debate whether the rumored price would be right for Yahoo shareholders, but the real question is still why a new management team would want to run a Yahoo crippled in this way.