Yahoo! Explores News Corp. Alliance

NEW YORK/SAN FRANCISCO,
February 14: Internet giant Yahoo!, after concluding that the Microsoft
takeover bid “substantially undervalues” the company, is said to be in talks
for an alliance with News Corporation.

Earlier this week,
Yahoo!’s Board of Directors unanimously rejected Microsoft’s unsolicited $44.6-billion
takeover proposal. A statement from the company said: “After careful
evaluation, the Board believes that Microsoft's proposal substantially
undervalues Yahoo!, including our global brand, large worldwide audience,
significant recent investments in advertising platforms and future growth
prospects, free cash flow and earnings potential, as well as our substantial
unconsolidated investments.”

According to press
reports, Yahoo! is said to be in talks with News Corp. in part to encourage
Microsoft to up its bid; Yahoo! is said to be looking for an offer of about $56
billion. The News Corp. venture being considered would see Rupert Murdoch’s
media conglomerate taking a 20-percent stake in Yahoo! in an effort to up the
company’s market value.

—By Mansha Daswani