|Internet search pioneer Yahoo Inc is hoping that a partnership with media conglomerate News Corporation can rescue it from a Microsoft takeover.|
Microsoft, the world’s largest software manufacturer, announced a $44.5 billion bid two week’s ago but Yahoo’s board subsequently rebuffed the unsolicited offer as undervaluing its slumping business.
A partnership with News Corporation could provide Yahoo with the escape hatch that the Sunnyvale-based company has been seeking since Microsoft announced its takeover bid. The possibility of Yahoo joining forces with one of the world's largest media empires could also prompt Microsoft to sweeten its bid to about $56 billion.
According to The Wall Street Journal, News Corporation is interested in folding its popular MySpace.com social network and other Internet assets into Yahoo. It would purchase a significant stake in Yahoo alongside an unnamed private equity firm and push the company's market value towards $50 billion.
Australian-American billionaire Rupert Murdoch, Chairman for News Corporation, stated last week that his New York-based company isn't interested in an outright acquisition of Yahoo but didn't rule out the possibility of a deal involving MySpace.com.
Most analysts believe Microsoft will do whatever necessary to buy Yahoo because it views the acquisition as the best way to counteract Google's dominance of the online search and advertising markets.
'Buying Yahoo makes tremendous sense for Microsoft, more sense than any other company in the world,' said Ken Marlin, a New York investment banker specialising in media and technology deals.