Yahoo/News Corp. merger?

Yahoo has added News Corporation to the list of potential partners that could save it from purchase by Microsoft, says The Wall Street Journal. The newspaper -- which itself has been purchased by News Corp. -- cites anonymous sources, who say that in exchange for a cash infusion, Yahoo would have to surrender a stake worth as much as 20 percent or more, thereby granting News influence over many websites and the world of online advertising. News already owns MySpace, IGN and Rotten Tomatoes.

The two companies have actually been discussing partnership repeatedly over the course of 18 months, but the obstacle has long been a valuation of MySpace: News is pushing for an estimate between $6 to 10 billion, which would affect the stake News could reasonably claim, according to the Journal's sources.

Yahoo may desperately need the help of News if it intends to retain its independence, or inflate the cost of a Microsoft acquisition. Google is rumored to be distancing itself from the prospect of helping Yahoo, while negotiations with AOL, if real, will have only recently begun. An original attempt at an AOL/Yahoo merger disintegrated completely, well before Microsoft's recent bid.

By Electronista Staff