News Corp is said to be in talks with Microsoft about joining its bid for Yahoo, according to sources quoted by the New York Times.
News Corp entering the mix may allow Microsoft to raise its bid, putting even more pressure on Yahoo to accept it. It would also remove News Corp as a possible alternate bidder for Yahoo.
A combined Microsoft/ News Corp/ Yahoo would marry Fox Interactive Media and most notably MySpace with Yahoo’s web properties and Microsoft Live and MSN services, creating an even bigger challenger to Google.
According to the Times, the talks between Microsoft and News Corporation are at a sensitive stage, with their source stating that “there’s a long way to go before anything is definite.”
The news comes after another colorful day in the Microsoft/ Yahoo standoff with Yahoo announcing a trial of Google ads against its search results, and Microsoft responding by saying that any Yahoo/ Google tie-up lessened competition.
Update: The WSJ is reporting that Yahoo is close to signing a deal to combine with AOL.