Reports that Yahoo is discussing a major deal with News Corp. in the face of Microsoft's acquisition attempt spread through the tech blogosphere Wednesday.
A purported deal would
spin off News Corp's Fox Interactive Media, including MySpace, IGN and Photobucket, to Yahoo, along with a cash investment that would give Rupert Murdoch's media conglomerate a 20% stake in Yahoo.
That would potentially boost Microsoft's valuation to $50 billion, well above the $44.6 billion Microsoft's bid Yahoo has already rejected. If nothing else, a competing News Corp. bid could help
pressure Microsoft to increase its offer.
Analysts expect the software giant to raise its bid from $31 a share to $35 or higher in the coming days. Spokespersons for both Yahoo and News Corp.
declined to comment on reports of the companies' purported talks first appearing on Silicon Alley Insider and TechCrunch.
--Mark Walsh
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