[Infowarrior] - Yahoo Is Said to Be in Talks With News Corp.

[Richard Forno]

February 13, 2008
Yahoo Is Said to Be in Talks With News Corp.
By ANDREW ROSS SORKIN and MIGUEL HELFT
http://www.nytimes.com/2008/02/13/technology/13cnd-yahoo.html?hp=&pagewanted
=print

Yahoo has begun discussions with News Corporation to explore alternatives to
Microsoft¹s buyout offer, people familiar with the talks said on Wednesday.

The preliminary discussions stem from an approach Yahoo¹s bankers made to
News Corporation last week as part of Yahoo¹s effort to find a ³white
knight² and avoid a hostile takeover by Microsoft.

The talks, which were described by both sides as a ³long shot,² center on
merging Fox¹s interactive assets ‹ led by the social networking site MySpace
‹ with Yahoo. News Corporation is participating in the talks, in part,
because, as one participant said, ³there¹s nothing to lose.² Either News
Corporation clinches a deal, or more likely, its interest pushes up the
price of Yahoo for its competitor, Microsoft. The Microsoft bid, a mix of
cash and stock, is now worth $42.1 billion.

News Corporation had sought a similar merger with Yahoo last year, people
involved in the talks said, but Yahoo rebuffed its overture before News
Corporation ever made a formal bid. At the time, News Corporation had teamed
up with Providence Equity Partners, a private equity firm that focuses on
media companies. The latest round of discussions are unlikely to include
Providence, these people said, though it remains possible.

The conversations between Yahoo and News Corporation follow Yahoo¹s
rejection of Microsoft¹s buyout offer on Monday. Yahoo said the offer, which
was worth $44.6 billion when it was made public on Feb. 1, was too low.

Following Yahoo¹s rejection, Microsoft vowed to press ahead with its bid,
saying its offer was ³full and fair.²

Representatives of Yahoo, Microsoft and News Corporation declined to comment
on Wednesday. The existence of the talks was first reported by the Web site
Silicon Alley Insider.