Yahoo in talks with News Corp. to fend off Microsoft
(02-13) 13:18 PST SUNNYVALE — Yahoo Inc. is in talks with News Corp., the owner of MySpace social networking site, about cooperating on a variety of fronts, people familiar with the matter told The Chronicle today.
The discussions are aimed at reviving Yahoo’s fortunes and fending off Microsoft Corp.’s recent acquisition efforts.
On Monday, Yahoo’s board formally rejected Microsoft’s $44.6 billion merger bid, but the Redmond, Wash., software giant quickly vowed to press ahead in trying to buy Yahoo.
Yahoo’s talks with News Corp., a media conglomerate chaired by Rupert Murdoch, may lead to the companies combining forces with their online properties, which reach hundreds of millions of users worldwide. As part of the deal, News Corp. may offer cash to Yahoo in exchange for a becoming a major Yahoo shareholder.
News Corp. owns MySpace, the most popular social networking Web site. Yahoo has struggled to compete in the space, which is considered a potentially lucrative source of online advertising revenue.
Yahoo and News Corp. had spoken in the past about joining forces, in particular News Corp. spinning off part of MySpace to Yahoo in exchange for a major stake in the Sunnyvale Web portal. Those discussions went nowhere.
Murdoch recently said during a conference call that his company was not interested in buying Yahoo, echoing the comments of a number of potential spoilers to Microsoft’s bid. But he was more circumspect about the prospect of trading MySpace for a stake in Yahoo, saying, “I think that day has passed but you never know.”
A Yahoo spokeswoman declined to comment other than to reiterate that her company’s board is evaluating a number of options, including remaining independent. News Corp. representatives did not immediately return telephone calls.
In mid-day trading today, Yahoo’s shares were up 32 cents to $29.89, or 1 percent. News Corp.’s stock was down 12 cents to $19.91, or .6 percent.
E-mail Verne Kopytoff at vkopytoff@sfchronicle.com.
