London, Feb.14 : Media baron Rupert Murdoch is reportedly in talks with Internet major Yahoo to merge with his MySpace online social networking site.
Murdoch's audacious move is aimed at scuppering Microsoft's attempt to buy the Yahoo, says The Telegraph. The two sides are also in discussions about merging Yahoo with News Corporation's other online properties. Under the deal being proposed, News Corporation would get a stake of more than 20 percent in Yahoo.
News Corporation and an unnamed private equity firm would also inject cash into the deal. The two companies have been in talks several times over the past 18 months, and should the combination work, it would help Yahoo fend off Microsoft's unsolicited takover bid for over 44.6 billion dollars.
The deal would also help News Corporation fight back against the growing dominance of Google's internet search business, and leave Microsoft bereft of a growth strategy.
Microsoft has been desperate to break into the online world, having seen its software and operating systems business deliver little value to shareholders in recent years. The company, founded by Bill Gates, has had to stand on the sidelines and watch as Google's stock price soared. Google has also left Yahoo in the shade as web users have flocked to the Google site.
A key element of the News Corporation-Yahoo discussions will centre on the value that Murdoch insists for MySpace, which he bought for 580 million dollars. The Wall Street Journal last night said Murdoch is expected to push for a value of between six to ten billion dollars.