Yahoo Decision Coming Next Week?
Despite all of Yahoo’s alternatives and its firm stance that Microsoft’s bid undervalues the company, sources cited by the Journal still maintain that Microsoft is the favorite to land Yahoo. But talks surrounding all of Yahoo’s other options intensified this week.
Yahoo, for instance, announced an arrangement with Google (Nasdaq: GOOG), where Yahoo would conduct a two-week test placing Google’s AdSense advertisements next to its search results in a trial that could lead to a broader partnership between the two. (See Yahoo to Test Google AdSense.)
Talks also heated up between Yahoo and Time Warner Inc. (NYSE: TWX) over a deal that would have Time Warner fold its AOL unit into Yahoo in exchange for an approximate 20 percent stake in Yahoo. The proposed asset swap would value AOL at around $10 billion. (See Yahoo Turns to Time Warner.)
Adding another wrinkle to the story this week was News Corp. (NYSE: NWS) (See Yahoo Calls on News Corp.) After originally proposing an alliance in which Yahoo would get control of MySpace, Rupert Murdoch proposed a scenario to Microsoft under which MySpace, MSN, and Yahoo would be combined into a separate company. Reports indicate however that Microsoft is unlikely to bring News Corp. in as a partner.
Any deal involving Yahoo would have some far-reaching effects in telecom circles, where Yahoo has several carrier relationships for content distribution, aggregation, and advertising placement. (See Yahoo, Microsoft Merger Could Aid Telcos, What Will Become of Yahoo?, and Top Five Signs Yahoo/XYZ Is the New Time Warner/AOL.)
— Raymond McConville, Reporter, Light Reading