On the heels of Terry Semel’s departure, Yahoo is rumored to be selling a 25 percent stake of their company, in exchange for News Corp’s MySpace. Such a deal would give Myspace an estimated value of $12 billion – not too bad, considering that News Corp paid $580 million for Myspace in 2005.

Internet Marketing Monitor lays out the pros for both parties,

“Yahoo! could benefit in three ways:

1. Ownership of another major Internet property
2. Access to the leadership of a successful, competitive company
3. Cross-pollination of News Corp’s media-centric customers with Yahoo!’s own media-centric customers, further solidifying Yahoo!’s position as an Internet media company.

“News Corp would get a couple of things out of the deal as well:

1. They could rid of MySpace (which I’m sure they always intended to do) and hand it over to company with MUCH more experience in managing online communities
2. Access to Yahoo! properties for the publicizing and display of News Corp media content
3. An outlet for Internet endeavors that wouldn’t require News Corp to create anything on their own.”
   

On the other hand, Michael Arrington of TechCrunch argues that Yahoo would lose out:

“Yahoo could certainly use the massive page views and user numbers, and they could kick Google out of that search deal from last year (or also hand search over to Google, as some rumors are saying).  But they need to focus on strategic acquisitions and a real game plan going forward.  To try and hit one out of the park with a monster acquisition, perhaps just as the MySpace star is fading, would be monumentally stupid.  Their shareholders would be much better served if they let Microsoft buy them.  And their users would be much happier with a Facebook merger, or no merger at all.”

Despite all, this is still just a rumor. Like last month’s rumor that Yahoo was considering a sale to Microsoft, it’ll likely stay as just that – fodder for the blog feed.

This entry was posted on Wednesday, June 20th, 2007 at 12:23 pm and is filed under Yahoo!. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.