Yahoo Sale: Microsoft Reportedly Shows Interest, Gains Access To Books

SAN FRANCISCO — It looks as if Microsoft wants a seat at the negotiating table if Yahoo decides to sell part or all of its business.

To gain better access, Microsoft Corp. has signed a nondisclosure agreement with Yahoo Inc., according to a person familiar with the situation. The person spoke to The Associated Press on Wednesday on the condition of anonymity because the agreement hasn't been formally announced.

The DealReporter and The New York Times earlier reported the arrangement between Microsoft and Yahoo.

Yahoo's board has been mulling the company's options since firing CEO Carol Bartz in early September. The alternatives include selling Yahoo's Asian assets, such as the Alibaba Group in China, and auctioning off the company in its entirety instead of hiring a new CEO. Tim Morse, Yahoo's chief financial officer, has been interim CEO since Bartz's ouster.

The DealReporter said that Yahoo's board is scheduled to meet next week to discuss its next step.

Microsoft unsuccessfully tried to buy Yahoo in 2008 for as much as $47.5 billion before walking away in frustration. Yahoo's stock is worth less than half of Microsoft's last offer of $33 per share.

Yahoo shares fell 3 cents Wednesday to close at $14.94. Microsoft's stock price dropped 32 cents to close at $24.47.

The New York Times reported that Microsoft is primarily interested in protecting its Internet search advertising alliance with Yahoo if its partner pursues a sale or a dramatic reorganization. Microsoft currently provides most of the search technology on Yahoo's website in return for 12 percent of the ad revenue generated from the results.

To preserve its business relationship with Yahoo, Microsoft already had explored contributing to a joint bid for Yahoo's U.S. assets with some of the buyout firms that have been considering making offers. That list includes Silver Lake Partners, Providence Equity Partners and the Texas Pacific Group.

Alibaba CEO Jack Ma has publicly acknowledged that his company would like to buy Yahoo, but that could be difficult because of U.S. government concerns about a Chinese business owning a U.S. company that handles email and other electronic communications.

Online Mortgage Scams Face Increased Government Crackdown

SAN FRANCISCO — A criminal investigation into mortgage swindlers has expanded beyond deceptive advertising on Google's Internet search engine to root out con artists who were luring their victims on Bing and Yahoo, too.

Monday's news of the widening probe confirmed that the Internet's three largest search engines had been turned into tools of prey for crooks looking to bilk homeowners scrambling to avoid foreclosure. The scams involved online ads making bogus promises of help people hold onto their homes under a government-backed program to modify mortgage payments.

After finding their victims using ads triggered by phrases such as "stop foreclosure," the swindlers extracted upfront fees or arranged to have the mortgage payments sent them without providing any assistance. The ruses had become increasingly common.

The crackdown had shuttered 125 mortgage scams by Monday, up from 85 last week, when the Office of the Special Inspector General for the Troubled Asset Relief Program announced it was cleaning up the misconduct on Google. The U.S. Treasury Department division said many of the con artists bought ads on all three search engines.

The identities of the alleged swindlers haven't been disclosed, partly because the criminal investigation is still open. A spokesman for agency steering the investigation declined to provide any further details Monday.

Like Google Inc., Microsoft Corp.'s Bing search engine agreed to stop accepting ads from hundreds of Internet advertisers and agencies tied to the scams. The ban also applies to Yahoo Inc., because it depends on Microsoft to sell its search advertising as part of a revenue-sharing partnership.

"Microsoft is committed to preventing fraud within its advertising network and online community and is working closely with the Special Inspector General for the Troubled Asset Relief Program to help tackle the problem of fraudulent mortgage-modification advertising," the software maker said in a statement.

The mortgage scams are the latest example of marketing malfeasance on large Internet advertising networks. Critics have complained the largely automated systems for buying ads next to Internet search results are vulnerable to abuse and that the companies running them aren't doing enough to screen the marketing pitches before they appear on websites.

The criminal investigation into fraudulent mortgage ads is surfacing three months after Google agreed to pay $500 million to avoid prosecution in Rhode Island for profiting from online ads from Canadian pharmacies that illegally sold drugs in the U.S.

Consumer Watchdog, a group that published a study about mortgage ad scams nine months ago, is calling for criminal charges and financial penalties against the major search engines in the current investigation.

"These Internet company executives were active enablers of fraud against vulnerable homeowners," said John Simpson, director of Consumer Watchdog's privacy project. "They cannot be allowed to benefit from these ill-gotten gains."