News Corp could swap MySpace for 25% stake in Yahoo!

by Andrew McCormick, Media Week 20-Jun-07, 11:50

LONDON - News Corp has offered its social network MySpace in exchange for a 25% stake in Yahoo!, according to reports. Newspaper The Times, part of Rupert Murdoch's media empire, reported this morning that despite talks taking place, negotiations are tentative.

Further doubt has been thrown on the possibility of a deal after Yahoo! chief executive Terry Semel left the company yesterday, handing the top job to co-founder Jerry Yang. A deal would see News Corp vastly increase its presence on the web, a strategy Murdoch has been vocal about since acquiring MySpace for $580m (£332.9m) in July 2005.

Meanwhile Yahoo! is keen to add to its social networking properties. The online publisher has built up a portfolio of social media sites and applications in the last few years, most notably buying photo-sharing site Flickr in March 2005 and social bookmarking site del.icio.us in December of the same year. Yet it has so far failed to buy in to the major global social networks and last year reportedly had a bid for Facebook turned down.