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Microsoft waits as Yahoo plays the field

Lisa Napoli Apr 10, 2008

Microsoft waits as Yahoo plays the field

Lisa Napoli Apr 10, 2008


KAI RYSSDAL: It’s getting so you can’t tell the players without a program. So here you go. Just to recap, Microsoft wants to buy Yahoo for something north of $42 billion. Yahoo’s not all that interested. Yesterday it made a short-term ad deal with Google. You know, just to test the waters. Cut to Microsoft. There are reports today Rupert Murdoch’s News Corp’s now helping the software giant with its bid. Murdoch owns MySpace, remember, and there’s a subplot that has Time Warner selling its struggling America Online to Yahoo, to help Yahoo stave off Microsoft. If you’ve got all that straight, then remember this.

Marketplace’s Lisa Napoli tells us there’s one reason and one reason only for all this back and forth.

LISA NAPOLI: All this whispering and back-door dealing comes down to this.

RAFAT ALI: It is all driven by a fear of Google.

That’s media analyst Rafat Ali of PaidContent.org. He says even if Microsoft, News Corp and Yahoo get together, and that’s a big if, they still won’t out-Google Google.

ALI: Even all of these three combined will have a tough time catching up to Google in terms of revenue.

In terms of audience, the still theoretical triumvirate would be massive, and that’s part of the allure for News Corp, which has been looking for ways to make more cash from its social networking site MySpace. Longtime net watcher and Vanity Fair Media critic Michael Wolff is writing a book about News Corp.

MICHAEL WOLFF: The News Corp people are not stupid and they’re looking at MySpace in this direct face-to-face competition with Facebook.

Of course, social networking could just be the flavor of the month on the Internet, just like Yahoo and its new would-be ally America Online once were golden. Media analysts don’t seem to think a Yahoo-AOL alliance will work. Jeff Chester, of the Center for Democratic Media, says all these deals may be good for business, but they’re lousy for those of us who use the Net.

JEFF CHESTER: For consumers, what this means is fewer choices in terms of search engines, their data being harvested by fewer but more powerful companies, and it’s not good when the bigger companies get bigger and the competitors are reduced.

Even though, regulators have allowed other cross-internet marriages of late. For now, figuring out how to grab the biggest slice of the advertising pie is what’s keeping media and technology moguls scrambling for deals. Most everyone seems to think that in the end, Microsoft’s going to get what it’s been after all along — Yahoo.

In Los Angeles, I’m Lisa Napoli for Marketplace.

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