UPDATE 9Yahoo seeks AOL tie; Microsoft talks to News Corp
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(Adds analyst comment seeing Microsoft as stronger offer)
By Eric Auchard and Anupreeta Das
SAN FRANCISCO/NEW YORK, April 9 (Reuters) - Yahoo Inc
(YHOO.O: Quote, Profile, Research), which was widely believed to be running out of
alternatives to accepting Microsoft Corp’s (MSFT.O: Quote, Profile, Research) takeover
offer, has become a target of two warring camps of technology
giants and their media allies, sources said on Wednesday.
News Corp (NWSa.N: Quote, Profile, Research) is considering joining Microsoft in a bid
for Yahoo which would bring in News Corp’s MySpace online social
hangout and create a more formidable rival to Internet
juggernaut Google Inc (GOOG.O: Quote, Profile, Research), newspaper reports said.
But Yahoo, which announced earlier on Wednesday it plans to
test Google search ads alongside Yahoo Web search services, is
closing in on a deal with Time Warner Inc (TWX.N: Quote, Profile, Research) with its AOL
unit, several sources told Reuters.
The game of musical chairs among the titans of the Internet
follows two years of on-again, off-again talks to strike
industry-reshaping mergers among different configurations of the
same players.
Google, unaccustomed to being backfooted by its rivals, is
considered a secondary player unlikely to enter the merger
bidding as its growing dominance in Web search and search-based
advertising could be blocked by competition regulators.
Reports were sketchy on exactly how a Microsoft deal with
News Corp might be structured, making it difficult for Wall
Street analysts to say which combination might prove the
superior offer. Several said Yahoo has regained some of the
negotiating momentum it appeared to have lost with Microsoft.
But UBS analyst Benjamin Schachter said neither an AOL deal
nor a reported plan by Yahoo to buy back a chunk of its shares
had enough funding to satisfy shareholders clamoring for a deal
worth at least Microsoft’s current offer of $31 a share. Continued…
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