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Yahoo: Microsoft Signs Pact to Join Lineup of Possible Bidders (Report)

The tech giant is seen as unlikely to buy Yahoo outright on its own, but has an interest in preserving its lucrative search ad partnership with the online firm.

NEW YORK - Microsoft has signed a nondisclosure agreement with online giant Yahoo, formally making the software giant another potential bidder for the company, which has been exploring its strategic options.

The New York Times' DealBook reported the non-disclosure agreement, which allows Microsoft to look at Yahoo's financial books, Tuesday afternoon.

Microsoft joins private equity firms Silver Lake, TPG Capital and others in taking a closer look at Yahoo. Some potential bidders balked at a provision in the non-disclosure agreement that forbids companies from talking to other interested parties, according to the Times.

The paper said though that Microsoft was unlikely to buy Yahoo outright on its own. Microsoft had held talks with potential partners last month about a possible joint bid, it cited people briefed on the situation as saying.

Microsoft’s key interest seems to be in preserving its lucrative search ad partnership with Yahoo, according to the Times. It said that Microsoft may also push for an integration of services from Internet communications provider Skype, which it recently acquired, into Yahoo.