Murdoch may want his space at Yahoo

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TEXT OF STORY

Tess Vigeland: So I went on MySpace earlier today to see wha's happnin' with my peeps. I saw Molly and Marcy and Lauren listed as "Cool New People." Molly already has 51 friends, BTW.

Rupert Murdoch was not on that list. Perhaps that's because Rupert Murdoch doesn't want to be cool. He wants to be a Yahoo. The News Corporation owner is reportedly in talks to swap the social networking site, which he bought back in 2005, for a 25 percent stake in Yahoo. The story was first reported by The Times of London — owned by Murdoch.

Janet Babin has the 411 from the Marketplace Innovations Desk at North Carolina Public Radio.

Janet Babin: The deal reported in The Times and on Web site TechCrunch says Murdoch's News Corp would trade Myspace for a 25 to 30 percent stake in Yahoo.

The web portal's had a tough 18 months. Its stock has dropped almost 30 percent, and yesterday Yahoo's CEO stepped down. But still, millions use Yahoo e-mail and news services.

Tim Bajarin with Creative Strategies says it's one of the most powerful web-based properties on the planet.

Tim Bajarin: They in that sense could give Murdoch a very solid direct connection to tens of millions of customers that are online that Murdoch covets.

Strategically, the time might be right to unload MySpace. The site hasn't exactly been on fire lately. According to comScore, MySpace attracted just 34 percent more unique hits over the past year, while Facebook, once coveted by Yahoo, logged 89 percent more.

Murdoch bought MySpace in 2005 for $580 million. If the rumors of a swap are true, he'd end up making billions. The deal might not be as profitable for Yahoo.

But blogger Om Malik, with GigaOm.com, says the company's so panicked it might actually accept the offer. If it does, the biggest gain for Yahoo might be an intangible: Murdoch himself.

Om Malik: With a guy like Murdoch, you know, hovering around the company, I mean he can push and pull a lot of deals. And I think what that company needs is like a really solid kick in the pants, right.

Neither company would comment on the alleged swap.

I'm Janet Babin for Marketplace.

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