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MySpace-Yahoo Trial Balloon: Possibly Selling MySpace To Yahoo; Outsourcing Search To Google

Just before Monday’s announcement of Terry Semel’s departure from Yahoo daily operations crossed the wire Monday, CNBC’s David Faber posted a speculative piece suggesting that Yahoo would be forced to consider “strategic alternatives.” The wildest among them: according to several of Faber’s sources, News Corp (NYSE: NWS). has studied the possibility of selling MySpace to Yahoo for a “significant stake” in the company — suggesting a MySpace valued at $10 billion would equal 25 percent of Yahoo (NSDQ: YHOO). (Faber’s the same reporter who broke the story of News Corp.’s bid for Dow Jones, moving it from the secret realm into the glaring public light.) Of course, a chunk of any MySpace valuation would come from the $900 million deal with Google that likely would disappear. The solution: Yahoo would outsource search to Google. Faber said a similar idea has come up at TW regarding AOL (NYSE: TWX) and Yahoo.

It’s likely that the management changes will park that trial balloon for at least the near future. Still, several news organizations have confirmed Faber’s report; they’ve also confirmed that the approaches/discussions were informal and hadn’t gone anywhere. Then again, stranger things have happened.

Times of London: The News Corp. newspaper says “other News Corp digital assets, including the games network IGN, bought in 2005 for $650 million, are also thought to have been offered to Yahoo.” A 25 percent stake in Yahoo would be worth $12.5 billion and “would demonstrate a remarkably swift return on News Corp

3 Responses to “MySpace-Yahoo Trial Balloon: Possibly Selling MySpace To Yahoo; Outsourcing Search To Google”

  1. Its be interesting to know who has been involved in the discussion at Yahoo regarding this potential deal. Maybe a heated topic of discussion at the boardroom?