Yahoo said to be discussing deal with News Corp. - East Valley Tribune: Business

Yahoo said to be discussing deal with News Corp.

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Posted: Wednesday, February 13, 2008 1:02 am | Updated: 11:12 pm, Fri Oct 7, 2011.

SAN FRANCISCO - Yahoo is discussing a possible Internet partnership with media conglomerate News Corp., its latest effort to repel Microsoft Corp.’s takeover bid or pry a better offer from the unsolicited suitor, a person familiar with the situation said Wednesday.

The specifics of the proposed joint venture haven’t been worked out, according to the person, who didn’t want to be identified because the talks are considered confidential.

Both The Wall Street Journal and a prominent blog, TechCrunch, reported that News Corp. is interested in folding its popular online social network, MySpace.com, and other Internet assets into Yahoo — an idea that first came up last year. News Corp. owns The Wall Street Journal.

News Corp. and a private equity firm reportedly would buy significant stakes in Yahoo as part of a complex deal designed to boost the Sunnyvale-based company’s market value above Microsoft’s initial bid of $44.6 billion, or $31 per share.

A Yahoo spokesman said the company continues to “carefully and thoroughly” evaluate alternatives that will enrich its long-term shareholders. Yahoo’s board reportedly is to meet again today or Friday.

News Corp. spokeswoman Teri Everett declined to comment on the Yahoo talks.

Yahoo shares climbed 31 cents to $29.88 Wednesday while Microsoft shares gained 62 cents to $28.96 News Corp. shares slipped 10 cents to finish at $19.93. Based on Microsoft’s current market value, its cash-and-stock bid for Yahoo now stands at $29.50 per share, or about $41 billion.

Yahoo rejected Microsoft’s offer Monday, insisting that its Internet franchise is worth more money. Microsoft has held firm so far, calling its original “full and fair” while threatening to launch a hostile takeover attempt.

“What’s unclear now is whether Yahoo is just trying to get a higher offer or if the company really doesn’t want to sell to Microsoft,” said Peter Falvey, a technology investment banker with Revolution Partners.

Although News Corp. Chairman Rupert Murdoch unequivocally said during a conference call last week that his company isn’t interested in an outright acquisition of Yahoo, he didn’t rule out the possibility of a deal involving MySpace. When asked whether he might renew the previous discussions with Yahoo about a MySpace alliance, Murdoch replied: “I think that day has passed, but you never know.”

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