Microsoft is holding initial talks with private equity firms that may be interested in buying Yahoo!, TheStreet TV anchor Rhonda Schaffler reports.

NEW YORK (TheStreet) -- Yahoo! (YHOO) stock is rising by 0.32% to $34.97 in late-morning trading on Monday, as Microsoft (MSFT) might help finance the purchase of the technology giant, sources told Reuters.

Private equity firms interested in Yahoo! have approached Microsoft, Reuters adds. The discussions are preliminary.

The two companies have well established search and advertisement agreements, which Microsoft is committed to maintaining.

Yahoo! is exploring a sale of its core Internet business, which includes search, mail and news sites. 

Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C-.

Yahoo!'s strengths such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins are countered by weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

You can view the full analysis from the report here: YHOO

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author. 

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