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Microsoft still sniffing around Yahoo

Microsoft wants to dominate web services just as Google does - and sees Yahoo as the answer

Shares in Yahoo have jumped on reports that Microsoft is planning on making an offer for the beleaguered web giant. Yahoo's valuation after the news was around $45 billion (£23bn) - up 18 per cent. Microsoft shares went down one per cent.

Microsoft has been repeatedly linked with the company and has now asked for formal takeover talks to commence. The New York Post says that Microsoft has taken on financial firm Goldman Sachs to advise it on the deal.

The speculation once again talks up the war against Google, as Microsoft seeks to mount its domination of web-based services. The search giant paid $3.1 billion (£1.56 billion) for online advertising company DoubleClick last month - the latest in a long line of huge deals.