Internet, media stars line up for Yahoo
Updated: 2008-04-10 21:10
San Francisco - Yahoo Inc.'s last-ditch efforts to avoid a takeover by Microsoft Corp. appear to be setting the stage for a dramatic finale featuring a rich cast of Internet and media stars.
 Yahoo CEO Jerry Yang poses for a photo in front of the Yahoo booth at the Consumer Electronics Show in Las Vegas in this Jan. 7, 2008 file photo. [Agencies] |
Eager to frustrate Microsoft in any way possible, Internet search leader Google Inc. has already agreed to help out Yahoo by participating in an unusual test that will gauge how much more advertising Google can sell for its struggling rival.
The two-week experiment announced Wednesday will be limited to ads posted alongside a small percentage of Yahoo's online search results in the United States.
Yahoo reportedly hopes to build upon the Google deal by combining its online operations with Time Warner Inc.'s AOL, which has been struggling to regain its stride after stumbling badly for years. Google already handles AOL's search advertising and owns a 5 percent stake in the Time Warner subsidiary.
As part of the AOL deal, Time Warner would make a cash investment in return for a 20 percent stake in the combined entity, according to a Wall Street Journal story that cited unnamed people familiar with the matter. Yahoo then would use the Time Warner cash to buy back stock to put some money in shareholders' pockets. Yahoo would pay between $30 and $40 per share for an unspecified amount of stock, the Journal said.
Microsoft's bid was worth about $42 billion, or $29.24 per share, as of Wednesday, when Yahoo shares closed at $27.77.
If Yahoo's maneuvering raises the pressure for a higher bid, Microsoft reportedly may mount its counterattack with a surprising ally - Rupert Murdoch's News Corp., whose media empire already includes the Fox television networks, The Wall Street Journal and the popular online hangout MySpace.com.
If Microsoft and News Corp. were successful in a joint bid, it would unite three of the Internet's most popular Web sites - Yahoo, along with MySpace and MSN.com.
The New York Times reported Microsoft's discussions with News Corp. late Wednesday, citing people involved in the discussions.
Yahoo had previously been exploring using an alliance with MySpace as one of its escapes from Microsoft.
All the negotiations are at a sensitive stage and still could unravel, according to the newspapers' reports.
Contacted late Wednesday, a Yahoo spokesman declined to comment on the reported AOL talks. Microsoft representatives didn't respond to inquiries.
The complex web of deals faces various complications.
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