Yahoo Calls on News Corp.

Now it's News Corp. (NYSE: NWS) that's talking to Yahoo Inc. (Nasdaq: YHOO). [Ed. note: Interesting.]

News sources, including The Wall Street Journal, are saying they've confirmed that the companies are discussing an alliance that would give Yahoo control of MySpace and other online properties.

It's the latest wrinkle in the clash of kings that has Microsoft Corp. (Nasdaq: MSFT) vying to buy Yahoo as a potential weapon against the hegemony of Google (Nasdaq: GOOG). Yahoo formally rejected Microsoft's $31-per-share buyout offer on Feb. 11. (See Yahoo Rejects MSFT.)

Reportedly, News Corp.'s goal would be to help Yahoo shore up its defenses -- in exchange for a stake in Yahoo of possibly more than 20 percent.

The WSJ -- owned by News Corp. -- has peddled a Yahoo/MySpace story before, but nothing's ever come of it; the companies apparently haven't agreed on a MySpace valuation in the past. The publication cites sources saying News Corp. would want a $6 billion to $10 billion valuation for MySpace.

Assuming Yahoo is ready to sell, its prospects of finding a big enough, suitable suitor are slim. No bids emerged to take the place of Microsoft's, and any deal with Google -- including tapping that company to handle Yahoo's search marketing, as many have suggested -- is likely to face a thicket of regulatory problems.

— Craig Matsumoto, West Coast Editor, Light Reading

Be the first to post a comment regarding this story.
Sign In