The Times, of London, on Sunday reported that Microsoft was in talks to buy Yahoo's search business for $20 billion. The newspaper said the deal was being lead by former AOL chairman and CEO Jonathan Miller and former Fox Interactive Media president Ross Levinsohn. Miller and Levinsohn would head up a new management team at Yahoo, according to The Times.
Embattled Yahoo CEO Jerry Yang last month said he would step down from his position, an announcement that caused the company's shares to briefly rally.
The Times' report was dismissed by a story Monday in one of the paper's News Corp. siblings, The Wall Street Journal. Levinsohn told the Journal that the British paper's story was "total fiction" and that no such deal is in the works. The Journal also cited unnamed sources at Yahoo and Microsoft who denied that the two companies were working toward an agreement.
Yahoo shares have been volatile in recent weeks as investors react, or overreact, to the rumor mill. The stock plunged more than 13% on Nov. 7 after Microsoft CEO Steve Ballmer said he was no longer interested in pursuing a merger with the online portal and search engine.
"We made an offer, we made another offer, and it was clear that Yahoo didn't want to sell the business to us and we moved on," said Ballmer, according to the Associated Press. "We are not interested in going back and relooking at an acquisition," Ballmer said. He made the comments at a business lunch in Sydney, Australia.
Microsoft earlier this year offered to purchase Yahoo outright for $31 per share, but talks between the companies ultimately broke off.
Yahoo shares were off more than 4%, to $11.03, as of early afternoon Monday.