News Corp. is in talks with Yahoo! about combining MySpace.com and other online properties owned by News Corp. in an attempt to scuttle Microsoft's unsolicited $44.6 billion takeover bid of Yahoo!, according to a report in The Wall Street Journal.
Under the deal, News Corp. would get more than a 20 per cent stake in Yahoo!, according to the report, which quoted people familiar with the matter. The deal would keep Microsoft from acquiring Yahoo!, while giving News Corp. control over a large number of internet properties and advertising markets. On Monday, Yahoo!'s board turned down Microsoft's offer, saying it undervalued the company.
The deal between Yahoo! and News Corp., which owns the Journal, would also include some cash from News Corp. and a private equity firm, according to the report. The deal is similar to one the two companies discussed over the past 18 months, but the talks fell apart over disagreement on the value of MySpace. News Corp. is expected to value MySpace at $6 billion to $10 billion, the Journal said, quoting the unnamed sources.
While not responding directly to the report, a Yahoo! spokeswoman said in an email, "Our board is continuing to carefully and thoroughly evaluate its strategic options and is committed to pursuing initiatives that maximize value for all stockholders."
News Corp. could not be reached for comment. Microsoft declined to comment.