Microsoft in merger talks with Google

Computer giant Microsoft was today reported to be pursuing a partnership or merger with online search company Google.

Bill Gates’s hi-tech empire was said to have held talks with Google in recent weeks, during which the possibility of a takeover was also raised.

But, despite the approach, Google still prefers to use Wall Street to sell its initial offering, according to the New York Times.

Both companies have refused to comment.

There has been intense speculation about Google in recent weeks after the company told Wall Street it hoped to sell shares to the public in the first half of next year.

Google has recently held meetings with bankers in preparation for an initial public offering, the newspaper said.

The offering could be worth between £9.4bn (€13.7bn) and £15.6bn (€22.7bn), according to estimates.

Google reportedly prefers selling its initial offering through Wall Street and then holding an online auction for the secondary offering.

Creators, Sergey Brin and Larry Page, are considering selling a 10% or 15% stake to the public, raising an estimated £1.25bn (€1.8bn).

Banks competing for the underwriting business are Credit Suisse, Citigroup, First Boston, Goldman Sachs, JP Morgan Chase, Morgan Stanley and Thomas Weisel Partners.

The interest shown by Microsoft indicates the power of the internet search engine, which was set up by the two Stanford university graduates in 1998.

Since its establishment Google has become one of the most used websites in the world.