Murdoch Mulls MySpace Swap for Yahoo Stake

21 June 2007

NEW YORK: Reports in UK newspaper The Times claim News Corporation is exploring swapping its MySpace online social networking site for a 25% stake in struggling internet search giant Yahoo.

NewsCorp, which also owns the Times, acquired MySpace two years ago for $580 million (€433m; £291m), together with other digital assets, as part of Rupert Murdoch's assault on the internet.

Discussions between the two companies are "tentative", says the Times and may be stalled by the sudden resignation of Yahoo's ceo, Terry Semel, who quit earlier this week. He has been replaced by the company's co-founder Jerry Yang.

The deal, if it were to go ahead, could provide Yahoo with a useful weapon in the war it is currently losing with online search leader Google, while NewsCorp would gain wider access to a much larger digital business.

Yahoo is worth $37 billion. A quarter stake in an enlarged company would be worth $11.1bn.

Neither party has confirmed the reports.

Data sourced from The Times Online (UK); additional content by WARC staff