By Eric Auchard and Anupreeta Das 1 hour, 26 minutes ago
SAN FRANCISCO/NEW YORK (Reuters) -
Microsoft Corp and News
Corp are in talks about a joint bid for Yahoo Inc that would
add MySpace to a proposed Microsoft-Yahoo combination,
newspapers reported on Wednesday.
Microsoft has said it will launch a hostile bid for Yahoo
and could lower its offer in about three weeks if it does not
get a deal from Yahoo, a Web pioneer which argues it is worth
more than Microsoft's $42 billion bid.
Any of the combinations, or another yet to be determined,
would fundamentally change the Web. Internet and media players
have been circling each other for two years waiting for a game
of musical chairs to begin in earnest and lead to
consolidation.
"The whole situation seems to be very unstable," said
Sanford C. Bernstein analyst Jeffrey Lindsay, adding that
Microsoft's bid for Yahoo precipitated a cascade of offers.
"There are so many pent-up moves for consolidation but it's
hard to say what moves will be successful," Lindsay said.
The talks with News Corp, which previously had discussed
working with Yahoo as a counter to Microsoft's unsolicited bid,
are at a sensitive stage, the New York Times said. The Wall
Street Journal called the talks "serious."
Yahoo's talks with Time Warner are growing closer over a
deal that would fold AOL's business, excluding its legacy
dial-up Internet access operations, into a combined Yahoo
company, a person familiar with the talks said.
Yahoo would receive cash from Time Warner in exchange for
20 percent of a combined Yahoo-AOL, the person said.
Microsoft, News Corp, Time Warner and Yahoo all declined to
comment on talks.
Terms of the proposed Microsoft-News Corp union are still
being worked out, the New York Times said. News Corp would
likely contribute its Fox Interactive Media unit, which owns
MySpace, and possibly cash to a partnership with Microsoft as
part of a Yahoo acquisition, the newspaper said.
(Additional reporting by Diane Bartz in Washington and
Daisuke Wakabayashi in Seattle; Editing by Braden Reddall)
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