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February 13, 2008

Yahoo Speculation Doesn't Stop

Yahoo was never at that party talking with Google about HGH....

OK, maybe I've got my stories a little confused today, but either way, the Yahoo rumors keep flying. First the scuttlebutt was all about Yahoo and Google revisiting the possibility of Google handling Yahoo's search ad business. Today the Wall Street Journal has a piece about how Google might be souring on that idea, which some believe could make Yahoo look weaker in the eyes of Microsoft or another potential buyer.

Next off, TechCrunch has reported its got confirmation that News Corp is back in talks with Yahoo about a possible deal that would spin off Fox Interactive Media into Yahoo. A News Corp spokesperson told me, "We’re not commenting on this."

During NewsCorp's earnings call last week, chairman and CEO Rupert Murdoch said, "We're definitely not going to make a bid for Yahoo. We're not really interested at this stage," when asked about the possibility of a News Corp bid for Yahoo. As for whether News Corp is considering an AOL purchase, Murdoch response was curt: "That's an even easier question. No," he said.

Still, Murdoch's response doesn't rule out discussions between the companies or a possible deal or spin off or whatever else they can come up with.

As observers of this tantalizing tale know, Yahoo rejected Microsoft's original bid for the firm, saying it "undervalues" Yahoo's brand, audience and investments. Then Microsoft came back essentially reiterating its initial argument, and implying it'll git git git Yahoo one way or another.

The potential Google search deal would be a crushing blow to Yahoo's ego, but many think it could help the firm survive a Microsoft takeover. An FIM deal could do the same. According to the TechCrunch report, "it is widely believed that, even with a News Corp. deal, Yahoo would need to outsource search marketing to Google to make the numbers work." And that would only add to the regulatory hurdles that could hamper a Google/Yahoo search deal in the first place.

What's more riveting, watching Yahoo twist in the wind, or watching Clemens and McNamee squirm before a House committee?

Posted by Kate Kaye at February 13, 2008 12:04 PM

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