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News Corp sniffs around Yahoo!

by Scott Bicheno on 14 February 2008, 12:10

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Who is the WSJ’s Deep Throat?

Once again the Wall Street Journal seems to be one step ahead regarding inside news on Yahoo! and specifically Microsoft’s bid to acquire it.

Imagine the surprise at the WSJ when the latest company associated with disrupting Microsoft’s efforts to get hold of Yahoo! turned out to be none other than News Corp – the Rupert Murdoch owned media empire that acquired WSJ publisher Dow Jones last August.

The WSJ’s “people close to the situation” have revealed that Yahoo!’s best chance of avoiding being acquired by Microsoft “may be a deal under discussion with News Corp., in which the media conglomerate would swap its ownership of MySpace and several other online properties for a stake of 20% or more in Yahoo.”

It includes a pragmatically flattering drawing of Rupert Murdoch at the top of the piece, despite not mentioning him by name, and says that News Corp executives have ruled out an outright bid for Yahoo!, after previously revealing that News Corp’s stock has taken a dive on the back of all this speculation.

The bid under discussion appears to be one that News Corp and Yahoo! have been mulling over for a while, in which News Corp gets a chunk of Yahoo! in return for giving it MySpace. A major sticking point has been the precise valuation of MySpace and the fact that if less than 20 per cent of Yahoo! is at stake, then the Yahoo! board wouldn’t have to put the deal to its shareholders for approval.

Coincidentally, the WSJ also claims that more “people familiar with the situation” have revealed that Google is losing interest in Yahoo! at just the time News Corp is supposedly getting involved. Handy that.

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