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News Corp. Backs Out Of Yahoo Race

News Corp. on Monday officially bowed out of the race to buy Yahoo, severely narrowing the options for the Web giant as it attempts to stave off a hostile buyout from Microsoft Corp. Yahoo and News Corp. explored the possibility of the media giant owning 20 percent of Yahoo in exchange for cash and assuming the whole of its Fox Interactive Media division, which houses the massive social network MySpace.

Yahoo was exploring this and other options, including a merger with AOL, in order to block Microsoft's $40 billion-plus bid for the company, which Yahoo rejected a month ago.

Susquehanna Financial Group analyst Marianne Wolk says the door hasn't shut yet for Yahoo, despite News Corp. backing out of a bid. "There's still a door open in terms of other potential types of deals," she said. Wolk rates Yahoo's shares a "neutral." Meanwhile, Microsoft maintains it will pursue "all necessary steps" to win over Yahoo's shareholders, including ousting the company's board of directors at its annual shareholder meeting, which is yet to be announced.



Read the whole story at Bloomberg »

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