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Yahoo May Revisit News Corp Deal

By Reuters  |  Posted 07-18-2008 Print
The potential for a bidding war over AOL brings a new twist in the ongoing Microsoft/Yahoo battle.

Yahoo is unlikely to get into a bidding war over AOL with Microsoft because if Microsoft gets in the way, Yahoo could instead renew talks over News Corp's Web properties, a person with knowledge of the plans said on Thursday.

Yahoo, seeking to shape an independent growth strategy after rebuffing Microsoft's bid to take it over, has kept in contact with News Corp, the source said, but discussions with Time Warner about AOL appeared further along.

News Corp chief Rupert Murdoch said just last week that a deal between his company--which owns the popular MySpace online social network--and Yahoo was "very unlikely."

Yahoo and Time Warner have been discussing the terms of a potential deal in which Yahoo would merge its operations with AOL, and Time Warner would take a minority stake in the combined company, sources have said.

Microsoft has also been discussing a potential AOL deal with Time Warner, another source said earlier this week.

Any deal between Yahoo and AOL was unlikely to happen before Yahoo's August 1 annual shareholders meeting, the first source said.

Such a deal would be one part of Yahoo's plans to grow as an independent company--plans that include a previously announced search ad tie-up with Google and a potential sale of Yahoo's Asian assets, the source said.

Yahoo said in a public filing on Thursday it was seeking ways to "unlock the value of our Asian assets"--holdings primarily in Japan and China worth around $9 per Yahoo share.


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