Following Microsoft’s $44.6 billion hostile takeover bid for Yahoo, Rupert Murdoch’s News Corp. has entered closed-door talks with the struggling search engine.
According to several sources, including the BBC and the Silicon Alley Insider, News Corp. is unlikely to pursue a full buyout of Yahoo. Instead, analysts think Murdoch’s company will merge the content of the two media giants.
“Say News Corp. convinces Yahoo that Fox Interactive Media is worth $6 billion and cobbles together another $9 billion in cash. At Yahoo's current market cap—post the Microsoft booster shot—the $15 billion would buy about a third of the company,” writes the Silicon Alley Insider
U.K. paper The Guardian
The move would also benefit Yahoo, who, in the words of The Guardian
, “has been perceived as falling behind in social networking—so it may relish access to MySpace.”
Yahoo’s financials have been struggling over the past few quarters. CEO Jerry Yang announced
on Jan. 29 that the search engine was planning to lay off 1,000 employees.
A transcript of a press conference on SeekingAlpha.com
reveals that News Corp. chair Rupert Murdoch and Yahoo have been discussing collaboration for around two weeks now—at the same time as Microsoft’s made takeover bid.
Murdoch has only gone so far as to confirm that Yahoo and News Corp. had “social meetings but that was about all. And that was with the previous chairman.”