Multiple sources claim that Yahoo is in talks with Rupert Murdoch's media conglomerate on a deal that would help stave off an acquisition bid by Microsoft.
Reports in The Wall Street Journal suggest that News Corp would take a 20 per cent stake in Yahoo in exchange for control of MySpace. News Corp purchased MySpace in 2005 for US$580 million.
Greg Sterling, founder of analyst firm Sterling Market Intelligence, said in a blog posting that the deal would greatly increase Yahoo's clout with advertisers.
"Yahoo would get massive page views and traffic, and could serve display ads, " he said. "This would add to Yahoo's existing CPM/display leadership."
The News Corp talks are the latest in a series of negotiations Yahoo has apparently undertaken in an effort to fend off Microsoft.
Google was among those named in the saga, reportedly looking to acquire Yahoo's search business. A rehash of a merger with AOL was also reportedly considered.
Microsoft first made its proposal on 1 February, offering a US$44 billion stock and cash package. Dips in Microsoft's stock price have since dropped the value of the package to US$42 billion.
Industry analysts said that, despite Yahoo's best efforts, an acquisition deal with Microsoft is all but assured at this point.
"A Microsoft acquisition is still the highest probability, although [the News Corp deal] represents a potential alternative," said Sterling.
News Corp named as latest Yahoo suitor
By Shaun Nichols on Feb 18, 2008 7:36AM