Summary:

Not a new development, but further confirmation that there may be one on the horizon. China’s Alibaba, Russian investor Digital Sky Technolo…

Yahoo (YHOO)
photo: Getty Images / Chris Hondros

Not a new development, but further confirmation that there may be one on the horizon. China’s Alibaba, Russian investor Digital Sky Technologies and U.S.-based VC firm Silver Lake are preparing a joint offer to buy Yahoo (NSDQ: YHOO), according to reports.

The story, which appeared today on Bloomberg, says that the three have already contacted Yahoo and its advisers.

But the discussions are only at an early stage and may never materialize as an actual joint deal. And if it does, it could open a can of worms over foreign ownership of a U.S. communications company, and that might halt the bid.

Bloomberg cited three unnamed people close to the situation as sources for its story. AllThingsD also named the three companies in a list of potential bidders in a post two weeks ago.

Alibaba’s chairman Jack Ma has made no secret of his interest in Yahoo: the two companies are already tied up in China, where Yahoo owns a 40-percent stake in the e-commerce giant. The report today speculates that Alibaba’s interest might partly be down to Ma wanting to get back complete control of his own company.

But that’s not the only pre-existing tie between these four companies. Silver Lake and DST are also currently investing in Alibaba — that deal, for an undisclosed amount, also includes Chinese VC, Yunfeng Capital, as well as Singapore’s Temasek as investors. The investment was announced last month and is currently closing.

Another source noted that Silver Lake’s hope would be to sell off all of Yahoo’s Asian assets (it also has an Internet JV with Softbank in Japan) in order to focus the business better in the U.S. for a potential buyer.

If these three actually end up buying Yahoo, it could catapult the company — which has seen better days and has found it a challenge competing against Google (NSDQ: GOOG) in search and its main revenue driver, online advertising — into potentially different tie-ups with a new set of companies. Silver Lake counts Groupon, Skype and Zynga among its investments (the Skype stake is currently being sold to Microsoft; (NSDQ: MSFT) that deal has not closed). Meanwhile, DST also invests in Groupon and Zynga, as well as being a large stakeholder in Facebook and Spotify.

But even if a deal involving Alibaba, DST and Silver Lake makes financial sense for Yahoo — the company fired its CEO last month and says it is exploring strategic options for the business — it could get scuppered by regulators unhappy with the idea of foreign ownership of a major internet company. Yahoo is the second-largest search engine in the U.S. and provides a range of communications services such as email and messaging. Companies like Huawei have been met with roadblocks in the past when trying to acquire U.S.-based equipment makers.

Yahoo, which currently has a market value of $17.1 billion, could be a great deal for the three companies although from the perspective of Yahoo, the best time for getting bought may have passed. When Microsoft tried to buy in the company in 2008, it made an offer of $47.5 billion.

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