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May 08, 2008
News Corp: We're Not Talking to Yahoo; Microsoft Works on Strategy
By Michael Dinan TMCnet Editor
Contrary to earlier reports, international media mogul News Corp. says it isn’t courting ideas about acquiring Yahoo, the company Microsoft (News - Alert) had tried to acquire with an eye on creating a search tool to rival Google’s.
The news comes as Microsoft Chairman Bill Gates predicts a strong Yahoo-less future for his own company, whose withdrawal of a $47.5 billion bid for Yahoo over the weekend sent shockwaves through the Internet world and Wall Street.
During News Corp (News - Alert).’s quarterly earnings call, executives said they had no deal cooking with Yahoo, according to new reports.
“To say talks have cooled overstates them,” Peter Chernin, News Corp. chief operating officer, said during the conference call as he answered questions about talks with Yahoo. “We have regular conversations with everyone in the space. I’m not sure I would ever characterize them as talks ... We always look at strategic options, but we feel very comfortable with our current positioning.”
Chernin and other News Corp. executives, including iconic Chief Executive Officer Rupert Murdoch, said they haven’t talked to Yahoo or AOL (News - Alert) in weeks.
Chernin was less clear about whether the company would speak to Microsoft about a joint venture as it would relate to Yahoo or AOL.
“We would respond accordingly to any propositions that we think did, or didn’t, make sense to us,” he said.
Analysts and industry leaders are closely following the steps that Microsoft and Yahoo are taking now that their near-deal has died.
Two days after Microsoft withdrew its unsolicited bid for Yahoo, Gates said that his company will walk away from the search engine and pursue other ventures. Yesterday, Microsoft reportedly was gauging Facebook’s interest in a possible deal.
Microsoft had walked away from the negotiating table after executives from the two companies couldn’t agree on a sales price. Yahoo’s board wanted $37 per share – a price that the company’s stock hasn’t reached in more than two years.
The figure was more than Microsoft was willing to pay, even though the company had upped its initial offer of $31 per share to $33. Half of the proposed deal would be financed with Microsoft’s own declining stock, which took a hit when negotiations broke down, falling to $29.40 per share.
The bid for Yahoo is Microsoft’s attempt to gain on Google (News - Alert) in the online search and advertising markets, experts say.
The bid for Yahoo is Microsoft’s attempt to gain on Google (News - Alert) in the online search and advertising markets, experts say.
Michael Dinan is a TMCNet Editor. To read more of his articles, please visit his columnist page.
