APPARENTLY DESPERATE, Yahoo has been talking with Time Warner about a deal to head off Microsoft's hostile takeover bid.
The Wall Street Journal reported that a possible deal would involve Yahoo taking ailing AOL off Time Warner's hands in exchange for the media giant acquiring a sizeable minority position in the merged company. Unidentified sources reportedly said the two companies believe they might save $1 billion per year by combining.
Those sources didn't go into details about how such a large cost savings might be accomplished, of course, but obviously such a massive expense reduction would require laying off thousands of employees.
Yahoo has also restarted talks with Rupert Murdoch's News Corp. That proposed deal would reportedly see Yahoo selling a large stake to News Corp. in exchange for Myspace.
Meanwhile Microsoft's initial $31 per share offer that Yahoo said was inadequate has lost value as Microsoft's share price has declined and it's now worth less than $29 per share. That value won't matter if Microsoft wins a proxy battle though. µ
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