graphic
News > Deals
Murdoch in alliance talks?
February 28, 2000: 4:56 p.m. ET

Yahoo, Microsoft said to eye stake in satellite unit of Murdoch's News Corp.
graphic
graphic graphic
graphic
NEW YORK (CNNfn) - Rupert Murdoch's News Corp. Ltd. is reportedly in talks with Microsoft Corp. and Yahoo! Inc. to offer the two U.S. technology companies up to 5 percent in News Corp.'s new satellite company.
    Ending a day rife with talk of News Corp. deals, the online edition of the Financial Times reported late Monday that Microsoft and Yahoo! are two leading contenders to take up to a 5 percent stake in News Corp.'s new satellite company, known as Platco.
    Murdoch reportedly has spoken with other firms also.
    Platco is a $35 billion company that is expected to be carved out of News Corp.'s satellite interests, the FT said.
    The report of Microsoft's involvement comes hours after a source familiar with the discussions told CNNfn that News Corp. and Yahoo! Inc. have held talks about a possible venture that could be built around News Corp.'s satellite assets.
    A pact between News Corp and Yahoo!, which so far is said to be in its earliest stages of discussion, would mark another pairing of old media and new media in the wake of America Online's $181 billion planned buyout of CNN parent Time Warner Inc.
    The FT quoted Murdoch as saying the AOL-Time Warner deal added a "greater sense of urgency" to his desire to craft an alliance for News Corp.
    However, a source told CNNfn's Peter Viles that News Corp. and Yahoo! have not discussed going as far as full-blown merger. 
    The New Yorker magazine, in its March 6 edition, first reported the talks between News Corp. President Peter Chernin and Yahoo! co-founder Jerry Yang. The two reportedly discussed a "wide-ranging alliance" that would give Yahoo access to key News Corp. assets such as Fox News Channel and newspapers such as the Times of London and the New York Post.
    The two companies would remain separate, but would take significant financial stakes in one another, the magazine reported. Yang recently told the magazine that Yahoo! wants to partner with old-media outlets, but is not interested in a merger.
    Yahoo! has traditionally denied the notion that it planned a blockbuster merger. Chairman and Chief Executive Tim Koogle said in January the highly valued company plans to continue its buyout strategy, but said it is wary of buying a traditional media company that could slow Yahoo! down from its breakneck growth pace.
    Spokeswomen for Yahoo! and News Corp. each declined to comment, saying the report was based on rumor.
    But Yang, speaking at a press conference in Seoul, South Korea, did not deny the possibility of a partnership by saying Yahoo was  talking to many companies around the world on building  partnerships.
    "I can't clearly comment on that ...," Yang said. "I  would say that we are talking to a lot of people and we are talking to all the major companies around the world."  
    The American depositary receipts of Australia-based News Corp. (NWS: Research, Estimates) jumped 3-5/8 to 58-3/4, but Yahoo! (YHOO: Research, Estimates) shares fell 3-1/4 to 161-15/16 in Monday trading. Back to top
    -- Reuters contributed to this report

  RELATED STORIES

Report Murdoch to rejig satellite assets - Feb. 14, 2000

  RELATED SITES

News Corp.

Yahoo!


Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney




graphic