News Corporation, Rupert Murdoch’s global media behemoth, could sell MySpace in exchange for a quarter of Yahoo!
Reports have emerged that Murdoch is apparently in talks with Yahoo! about selling the social networking giant for $12.3 billion (£6.2 billion) for a 25% stake in one of Google’s main competitors.
According to a report in News Corp-owned newspaper The Times, talks are at a tentative stage. News Corp has proposed that Yahoo! allows it to buy a 25% stake in the business in exchange for MySpace and a host of other digital assets, including games network IGN.
It is also unclear whether the talks will continue, following yesterday’s resignation of Terry Semel, chief executive of Yahoo!, who will be replaced by co-founder Jerry Yang (see Terry Semel Steps Down As Yahoo! Chief Exec).
A 25% stake in Yahoo!, once enlarged by the addition of MySpace, would be worth $12.3 billion. This is nearly a 24-fold increase on the $580 million sum NewsCorp paid for MySpace and associated businesses in 2005 (see MySpace Could Be Worth $15 Billion). Yahoo! is currently worth $37 billion (£18.6 billion).
According to The Times report, it is unclear whether Yahoo! was willing to consider the terms of the deal, but it is not a secret that the company has been very keen to acquire a major global social networking website (see Yahoo! Could Buy Bebo) after failing to buy Facebook for $1 billion (£503 million) last year (see Facebook Rejected Yahoo! Bids).
Semel, who will stay on in a non-executive role, has experienced a 30% drop in Yahoo!’s stock price over the past 18 months. The company has also missed out on acquisition opportunities, such as the Facebook site and advertising services company DoubleClick, which was bought by Google (see Google DoubleClick Acquisition Under Investigation).
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