The Times is running a story that News Corp is in negotiations with Yahoo that would see News Corp give MySpace to Yahoo in return for a 25% stake in Yahoo itself.
The report claims that the discussions remain tentative and could collapse after the departure of Yahoo CEO Terry Semel. Other News Corp assets including IGN are believed to also be on the table as part of the deal.
To say that it’s a rumor out of left field would be an understatement, and yet it’s not impossible either. Yahoo is still desperate to get its hands on a major social networking platform, having failed to buy Facebook and more recently being rumored to be in acquisition talks with Bebo.
On the News Corp side there would be absolutely no reason why the company would wish to hold on to MySpace when a potential deal could deliver it access to a much broader audience. Rupert Murdoch has a long history of selling out when the return is right, and given the potential risks MySpace faces from the rapidly growing Facebook now would be as good a time as any trade MySpace.
MySpace would deliver in excess of 150 million users to Yahoo, although there would likely be duplication in the user base. More importantly for Yahoo it would also deliver Yahoo search to MySpace, presuming that the $1billion 3 year deal between Fox Interactive and Google could be broken.
Michael Arrington at TechCrunch has confirmed the story. It’s not signed but it is definitely being talked about.