News Corp. Talks Deal With Yahoo

MySpace merger could create new company, deny Microsoft

By Jonas Oransky, Newser Staff

Posted Feb 13, 2008 2:36 PM CST

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News Corp. Talks Deal With Yahoo — This combination of two file photos shows Microsoft CEO Steve Ballmer, left, and Yahoo CEO Jerry Yang. Yahoo Inc. on Monday, Feb. 11, 2008 spurned Microsoft Corp.'s $44.6 billion takeover bid as inadequate, betting that it can elicit a higher offer from the world's largest software maker or find another... (Associated Press)

News Corp. and Yahoo are in talks over combining MySpace and other News Corp. entities with Yahoo, the Wall Street Journal reports today. The deal, which could fend off Microsoft's $44.6 billion hostile takeover bid, would allow Yahoo to remain independent while giving the Murdoch-run company a stake of roughly 20%. An acquisition by Microsoft still seems the most likely outcome, but Yahoo is scrambling for other options.

News Corp. and Yahoo have discussed a deal in the past, but have never agreed on MySpace’s value—which the Murdoch-ites place between $6 billion and $10 billion. The pact currently on the table would include a major cash infusion for Yahoo. Rupert Murdoch coyly left the door open to a deal on a recent earnings call: “I think that day has passed but you never know.” (More Yahoo stories.)

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