News Corp. Won't Fight Microsoft for Yahoo!

After considering linking his MySpace Web service to Yahoo!'s various Web properties, News Corp. CEO Rupert Murdoh said Monday that it cannot compete with Microsoft's $44.6 billion hostile takeover offer for Yahoo!. Murdoch never seriously considered buying Yahoo! outright, as Microsoft has offered, but instead trying to work a combination of the companies that would be strong enough to satisfy Yahoo! shareholders. Apparently, that's just not feasible.

"We're not going to get into a fight with Microsoft, which has a lot more money than us," Murdoch told investors a media conference Monday. His MySpace property, widely considered the most popular social networking site on earth, already has an advertising relationship with Google. News Corp. recently purchased The Wall Street Journal, and Murdoch intends to increase that paper's presence online as well.

As for Yahoo!, options and time are running out, though the company was able to temporarily fend off Microsoft's hostile takeover bid by delaying the date of its next board nomination period. Microsoft is expected to try and replace Yahoo!'s current board during this process and replace it with one that is more amenable to the takeover.