Yahoo! may consider an alliance with Google in order to ward off a takeover bid from Microsoft, a source familiar with Yahoo!’s strategy told Reuters. Yahoo management is considering revisiting talks held with Google several months ago on an alliance. At USD 31 a share, Yahoo believes the unsolicited bid from Microsoft undervalues the company, two sources said. The Wall Street Journal reported that Google’s CEO Eric Schmidt called his counterpart at Yahoo, Jerry Yang, to offer his company’s help in any effort to thwart Microsoft’s bid. Spokesmen for Yahoo and Google declined comment.

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