New Twists In The Microsoft-Yahoo Tale

Microsoft and News Corp. discuss a joint bid for Yahoo, while Yahoo forms a two-week ad alliance with Google.

Microsoft’s quest to take over Yahoo has entered into a series of turns trickier than any Formula One race track. Reports yesterday stated that Microsoft is now in talks with News Corp., which owns the Wall Street Journal and MySpace, to form a joint bid to take over Yahoo.   If successful, that could create an Internet behemoth. But it’s far from the only development. Sources also say that Yahoo is in merger talks with AOL. And if that wasn’t quite enough for one day, Yahoo and Google have announced a two-week trial that will see them sharing ad space. During the period, Google will place ads on 3% of the search results on Yahoo – a very dramatic twist that gave a 7% boost to Yahoo shares.   This has all happened since Saturday, when Steve Ballmer, Microsoft’s chief executive, gave Yahoo a three-week deadline to agree to his company’s offers.   Yahoo has previously entered into talks with News Corp. itself as a way to counter the Microsoft bid.   No details of the Microsoft-News Corp. alliance have been released. However, according to the New York Times, it seemed likely that News Corp. would put its Fox Interactive Media unit (which owns MySpace) into the pot, along with cash.   If any of these partnerships works out, they will radically change the face of the Net.