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Apr 11, 2008

NEWS: Microsoft Bidding for Yahoo-The Soap Opera

Ed: AOL, Google, Fox have joined the band of hunters circling Yahoo's dead meat. Discussions center on my value - not integration plans to better serve users. Sad.

Microsoft/News Corp. Deal In The Works "For Days"

We hear that the Microsoft/News Corp. negotiations, firstreported 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...

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

Google Calls Quattrone For Yahoo/Microsoft Advicefrom TechCrunch by 

Google has hired boutique investment bank Qatalyst Group to provide advice on the ongoing battle between Microsoft and Yahoo.

Qatalyst Group is headed by colorful Silicon Valley investment banker Frank Quattrone, who as we noted in March has returned to the Valley after spending years in the wilderness fighting obstruction of justice charges...

News Corp., AOL Pursue Yahoo Deals

Murdoch, Microsoft 
Consider Joint Bid; 
Google Ad Pact

Yahoo Inc. and Time Warner Inc.'s AOL are closing in on a deal to combine their Internet operations, a move aimed at thwarting MicrosoftCorp.'s effort to acquire Yahoo, people familiar with the matter said Wednesday...

Under the terms being discussed between Yahoo and Time Warner, the latter would fold its AOL unit into Yahoo and make a cash investment in return for about 20% of the combined entity, people familiar with the situation said. The deal, which wouldn't include AOL's dial-up access business, would value AOL at about $10 billion. As part of the deal, Yahoo would use the Time Warner cash and additional funds to buy back several billion dollars worth of its own stock at a price somewhere in the middle of the range between $30 and $40 a share, the people said.

See complete coverage of Microsoft's bid for Yahoo, including recent blog posts on the deal and an interactive stock timeline.

Yahoo is also talking to Google about outsourcing search ad sales. On Wednesday, the two companies announced a test deal around search advertising.

Microsoft kicked off the battle for Yahoo nine weeks ago with a cash-and-stock offer then valued at $44.6 billion, or $31 a share. As of Wednesday, the deal is worth $29.24 a share because Microsoft's share price has declined. Yahoo shares closed at $27.77, up seven cents, or 0.25%, in 4 p.m. trading on the Nasdaq Stock Market Wednesday.

A visual guide to the Yahoo mating dance
Posted by Dan Farber
Our CNET News team put together a visual guide to the Yahoo mating dance. It might come in handy when the Yahoo board of directors meets tomorrow to consider the various options. Most bets are still on Microsoft upping its bid to capture Yahoo.

NEWS: Microsoft Wants Yahoo

See AdEcon scorecard.

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