Recently, News Corp has expressed interest in trading MySpace to Yahoo! in exchange for a 25% cut of all Yahoo! stocks.
But wait... on Wednesday I wrote about the changes (challenges?) Yahoo! has faced, primarily its new CEO Jerry Yang and the substantial drop in Yahoo! stocks over the past months. So amid all this tumultuous activity, why would a social networking site mogul like MySpace want to invest itself in Yahoo! at all?
One incentive could be the $12 billion News Corp would earn from the deal. Despite a decrease in Yahoo! stocks, the company is still worth an estimated $37 billion. Conversely, with a teammate like MySpace, Yahoo! could have a fighting chance against long-time competitor Google (with its famous YouTube partner), which reportedly “make[s] more money in a quarter than Yahoo does in a year.”
I don’t know about all this. It seems to me that Yahoo! is so intent on “trying to out-Google Google” (as Jim Breyer puts it) that tactics are turning from methodical to hasty. Still, this merge proposal was presented informally, and a partnership is far from finalized.
Furthermore, News Corp first introduced this proposal to Terry Semel, the very recently resigned Yahoo! CEO. As the new CEO, Yang may put MySpace on the back burner, and focus on organically boosting Yahoo! instead of taking on outside partners.
For more coverage, check out this New York Times article.
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