Google Looking to Buy Yahoo

A potential investment by Microsoft, a longtime Google rival, also may have prompted Google's interest in a financing deal involving Yahoo, Sterling said.

Alibaba interest

Alibaba Group Holding, whose largest shareholder is Yahoo, has said it's “very interested” in the web portal, an arrangement that would help the Chinese company buy back its 43 per cent stake.

KKR & Co. and Blackstone Group are among firms weighing an offer for Yahoo, people familiar with the matter said earlier this month.

Alibaba has discussed a plan with Silver Lake and Russia's Digital Sky Technologies to make a joint bid, people familiar with the matter have said. Another group interested in an offer includes Providence Equity Partners and former News Corp executive Peter Chernin, people have said.

Google advertising customers are able to buy space on Yahoo sites through Google's Invite Media service, according to the person familiar with Google's deliberations.