Yahoo, Time Warner reportedly discuss deal to thwart Microsoft bid

Yahoo and Time Warner have held talks on a deal designed to thwart Microsoft's bid for Yahoo, according to a report in The Wall Street Journal.

Under a possible deal, Yahoo would acquire Time Warner's AOL in exchange for the media conglomerate taking a large minority stake in the combined company, according to unidentified sources familiar with the matter. The companies could save $1 billion a year, the sources said. Talks between the companies held earlier heated up when Yahoo reapproached Time Warner about a proposal to take to its board.

Meanwhile, Yahoo and News Corp. continue to talk as well, discussing a deal under which News Corp. would sell its MySpace.com social network to Yahoo in exchange for a stake in the company, the report said.

Yahoo has rejected Microsoft's acquisition bid, saying it undervalues the company. The $31-a-share price at the time the bid is now worth $28.62 because of a drop in Microsoft's share price.

Microsoft is expected to propose its own candidates for Yahoo's board and has until March 14 to do so, but Yahoo could try to push the deadline back, the sources said. If the deadline doesn't change, Yahoo and Microsoft could hold discussions this weekend and avoid leaks affecting their stock prices, a source said.

Microsoft has recruited Alan Schwartz, chief executive of Bear Stearns, as well as Morgan Stanley and Blackstone Group, to help figure out a winning acquisition strategy.

The sources told the Journal that Microsoft will likely end up purchasing Yahoo, despite the Time Warner and News Corp. talks.

[MyRightEye]

Is M$ aware of the users that will abandon Yahoo?

There's no way in God's green earth that I will use anything Yahoo <br />related if they are bought out by MS. Surely others feel the same <br />way. Does MS not understand this? All they will do is kill a <br />competitor. Maybe that is enough for them.

[Robert_Allan]

at least spice up your post with some speculation

Well, what percentage of the Yahoo! user base do you think would leave? It's hard to imagine more than some number (as a percentage of installed OS base) larger than a subset of the the installed user base of Linux and OS X.<br /><br />The executives at MS aren't as stupid as reading reader comments on web sites would lull you into believing.

[devon.leslie]

Abandon Yahoo for what?

Whether users stay with Yahoo or not is their perogative - but considering the only viable alternative to Yahoo Instant chat (in terms of offering and functionality) is Microsoft Live, what choice do users really have? I hear a lot of fans shouting 'Google' these days, but apart from a superior web-based email system, I have yet to see anything of real consequence from the owner of YouTube. I cite YouTube because it's quite apparent that although Google owns it, they have absolutely no idea what to do with it considering it hasn't changed one iota.

[jshee42]

Let me guess....

You're a mac-**** or linux-geek, right? The average user won't care WHO owns Yahoo, just that it still exists. I pride myself in being a geek. I pride myself for being proficient on more than one OS, but if something like this happened, I wouldn't stop using Yahoo just b/c it changed ownership. That's just the rational of someone who can't see the bigger picture.

[Miked350z]

Me either

There are allot of folks that are in the same boat. Its very easy for <br />me to get my news and mail and instant messaging from <br />somewhere else. Its not like I have to lift anything heavy to make it <br />happen. MS buys yahoo, and I am gone too. Oh.. and yes.. I am in <br />a windows free env. both at work and at home.