Yahoo spent US$79m fending off Microsoft

The financial papers show that Yahoo spent a whopping US$79m on outside advisors as it looked for alternatives to the deal and considered ways to avoid the search marketing tie-up.

Yahoo stated in the filing, released to the US Securities and Exchange Commission, that the money was spent on "outside advisors related to Microsoft's proposals to acquire all or a part of the company, other strategic alternatives, including the Google agreement, the proxy contest, and related litigation defence costs".

The Google agreement refers to a proposed partnership between the two firms that failed under anti-competition scrutiny.

Microsoft is still keen on a Yahoo deal, and the firm's chief executive, Steve Ballmer, has said that a relationship could still be important to both parties given the competition offered by Google.

Ballmer explained in a conference call with journalists last week that he was still trying to find ways for Microsoft and Yahoo to work together.

Also last week, Yahoo's new chief executive, Carol Bartz, announced a major restructuring and hinted at a number of further changes.

Although she did not explicitly mention Microsoft, it is thought in the industry that one of the reasons for Jerry Yang's departure was his refusal to consider the deal.