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Thursday, February 14, 2008

News Corp wants to dump Myspace into Yahoo

Talk about a poison pill.

On their last quarterly call, Google basically said they can't monetize social networking properly. They specifically meant Myspace where Google signed a billion dollar deal to provide lump sum payments to News Corp for the right to provide search results from within Myspace and serve advertising to their customers. They pretty much said it's been a bad deal for them.

I don't see how it'd be a better deal for Yahoo. Yahoo can't even monetize their own base properly.

It would be a great disservice to shareholders were Yahoo to move forward with a deal like this. I would imagine they would get blocked.

Yahoo stock is bid up on this, I suppose on the notion that Microsoft will have to pay higher to secure the deal. I disagree. I think if this is the best Yahoo can come up with, Microsoft is going to walk away with the company at $31.

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