Yahoo opens floor to Murdoch

Yahoo founder Jerry Yang

TEXT OF INTERVIEW

Doug Krizner: Yahoo needs a partner to help fight off that hostile takeover from Microsoft. This morning, the Wall Street Journal reports Yahoo's dancing with Rupert Murdoch. There've been discussions on a deal to give Murdoch's News Corp a 20 percent stake in Yahoo.

Let's bring in Marketplace's Lisa Napoli, who keeps on eye on all things Internet. Lisa, even the Journal, Murdoch's own newspaper, calls this a long shot. Why is that?

Lisa Napoli: Well, because, you think about this -- would you turn down $44 billion for a stake in MySpace? Seems like a better deal to take $44 billion or something in that neighborhood.

Krizner: What are the bloggers saying about this?

Napoli: Everybody seems to think that Yahoo is just bucking for more money from Microsoft and doing it in this very public in dramatic way. But nobody really seems to think it can actually go through. See, the bloggers are basically saying that Steve Ballmer of Microsoft and Jerry Yang of Yahoo should just sit down to dinner, get rid of all the advisors, and just get on with it.

Krizner: Consider the Murdoch deal for a moment. Does that tie-up make sense in any way?

Napoli: It makes sense if you believe that you're going to be able to sell all the ads on MySpace. But it doesn't help Yahoo strengthen what it needs to strengthen, which is its search business. The other problem is MySpace is a little bit old news. Facebook -- which, by the way, Microsoft owns a piece of -- is kicking MySpace's butt.

Krizner: Why is Yahoo objecting so strongly about Microsoft taking the company over?

Napoli: Well, that Jerry Yang, the cofounder of Yahoo, doesn't want to give up his baby. He wants independence -- he really doesn't want to have to sell out to anybody. Doing a deal is one thing. But acknowledging that Yahoo isn't the dominant player it once was years ago is a tough bet.

Krizner: Marketplace's Lisa Napoli. Thanks so much.

Napoli: Thank you!

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