News Corp joins Microsoft on Yahoo bid

SAN FRANCISCO/NEW YORK - Microsoft and News Corp are in talks about a joint bid for Yahoo that would add MySpace to the Yahoo-Microsoft combination proposed by the world's largest software maker, the New York Times reports.
The talks with News Corp, which previously had discussed working with Yahoo as a counter to Microsoft's unsolicited bid, are at a "sensitive stage," the newspaper quoted people involved in the discussions as saying.
Yahoo faces a three-week deadline from Microsoft to reach a deal or face a hostile effort to take over the board, and it is eagerly searching for alternatives or proof that it is worth more than Microsoft's offer, now valued at US$42 billion ($53 billion).
Yahoo's talks with Time Warner are growing closer over a deal that would unite Yahoo and AOL, according to a person familiar with the talks, as Yahoo prepares to test using Web search advertising from Google.
Microsoft, News Corp, Time Warner and Yahoo all declined to comment on talks.

Terms of the proposed Microsoft-News Corp union are still being worked out, the New York Times said. News Corp would likely contribute its Fox Interactive Media unit, which owns MySpace, and possibly cash to a partnership with Microsoft as part of a Yahoo acquisition, the newspaper said.
A joint News Corp-Microsoft effort could pave the way for a higher offer for Yahoo and put more pressure on the company and its shareholders, the newspaper added.
- REUTERS