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Thu, 10 Apr 2008 10:06:09 GMT
Thu, 10 Apr 2008 10:06:09 GMT
Digital Business, Live From New York.
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Microsoft/News Corp. Deal In The Works "For Days"
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Thu, 10 Apr 2008 02:53:00 GMT
Peter Kafka
We hear that the
Microsoft/News Corp. negotiations
, first
reported by the New York Times tonight,
aren't the result of today's Google/Yahoo news -- a source tells us Rupert Murdoch and Steve Ballmer's teams have "been on it for days, working hard", and that Yahoo is understandably "pissed" about the attempted union.
Do the MSFT/NWS talks predate the GOOG/YHOO talks or the
YHOO/TWX talks
? We don't know.
But wait a minute. Didn't Rupert Murdoch say last month that he was doing chasing after a Yahoo deal? No, he didn't.
Instead, when asked about his interest in Yahoo last month at a Bear Stearns conference, Rupert
backed away
-- but not all the way: "We're not going to get into a fight with Microsoft, which has a lot more money than us."
Our thoughts then:
Many of the
news
outlets
covering Rupe's appearance at the Bear Stearns conference have read his
comments as definitive proof that News Corp. (NWS) is no longer
pursuing a deal. We think it's a bit less than that. While Rupe is
entertainingly free-wheeling at these events, he also tends to parse
his words fairly thoughtfully. Note what he didn't say: "We are no
longer pursusing any sort of deal with Yahoo."
We think that's telling. Asked about a potential Yahoo deal all the way back at
NWS's Q2 conference call
,
he dismissed the idea -- but not entirely: "I
think that day has passed but you never know," he said. And in fact
Yahoo and NWS were indeed chatting about the idea. We think the odds on
this deal are very very low indeed. But we wouldn't close the betting
books just yet.
And Rupert's interest in a NWS/MSFT/YHOO deal makes as much sense as his interest in a NWS/YHOO deal did earlier this year. Rupe has spent around $1.5 billion building up Fox Interactive Media (MySpace, IGN, Photobucket and some odds and ends) and by all accounts it's been a heady investment. Even if
FIM can't meet the $1 billion sales goal
he laid out for it last summer, it's still likely to generate $800 - $850 million.
But if he can take FIM , plus some cash (he's got about $3.5 billion on hand) and turn it into a 10% - 15% stake of a Yahoo/MSN/FIM combo, why wouldn't he? Getting it done is a different matter. A source tells the NYT negotiations are
"sensitive" and we imagine Rupe's facing the same hurdles he did the
last time around: Trying to convince a partner (in this case,
Microsoft), that FIM is worth $6- $7 billion. But if he can get
anything close, he should jump on it.
See Also:
Jerry Strikes Back: Yahoo/AOL Deal May Be Announced Next Week
MySpace Yahoo Deal: Don't Count On It
NWS
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Microsoft and News Corp May Make Joint-Bid For Yahoo
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Thu, 10 Apr 2008 01:33:00 GMT
Henry Blodget
It's deal night here at SAI, and it just keeps getting better.
Yahoo and AOL are reportedly on the verge of announcing a
surprise merger plan,
as part of a brilliant Yahoo counter-attack. And now Andrew Ross Sorkin and Miguel Helft report that Microsoft and News Corp (NWS) are in talks to make a joint bid for Yahoo:
News Corp (NWS) is in talks with Microsoft (MSFT) about joining in its contested bid for Yahoo (YHOO), according to people involved in the discussions. The pairing, which
would combine Yahoo (YHOO), Microsoft's MSN and News Corporation's MySpace, would create a behemoth that would upend the Internet landscape.
If News Corporation throws its weight behind Microsoft's offer, it
could allow Microsoft to raise its bid, putting even more pressure on
Yahoo and its shareholders. At the same time, the alignment of
Microsoft and News Corporation would remove a possible alternative for
Yahoo, leaving it with fewer opportunities to escape Microsoft's grasp.
The
talks between Microsoft and News Corporation are at a sensitive stage,
people involved in the discussions said. 'There's a long way to go
before anything is definite,' one person involved in the talks said.
Terms of the proposed union are still being worked out, these people
said, and remain murky. News Corporation would probably contribute its
Fox Interactive Media unit, which includes MySpace, and possibly cash
to a partnership with Microsoft as part of an acquisition of Yahoo,
they said.
Would this combination make sense? Why not. Owning MySpace standalone isn't doing Rupert any good--he's getting his clock cleaned by Facebook. MSN, of course, is dead in the water. But throw all that together with Yahoo and you could build a pretty honkinging global communications, social networking, and advertising platform.
Rupert's got some cash, too, which means that the two might be able to pay more without infuriating their own shareholders.
In any event, at this point, you gotta believe Yahoo's stock is going up.
Don't Miss
Jerry Strikes Back: AOL and Yahoo May Announce Merger Next Week
Brilliant Yahoo-Google Counter-Move Bolsters Case for Higher Takeout Price
NWS
YHOO
MSFT
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