The heavyweight merger tussle between Microsoft and Yahoo admitted a new entrant this week with Rupert Murdoch apparently mulling over a 'white knight' deal which would see Newscorp's MySpace merged with Yahoo in return for 20% ownership. A number of Yahoo's shareholders are keen to take the Microsoft dollar, albeit at a higher offer, but founder Jerry Yang, who returned to head the troubled company 8 months ago, is "loath to hand his baby to Bill Gates' Microsoft" (Daily Telegraph, 15 Feb), hence rumours of a dinner with Murdoch and some admiring glances in the direction of Time Warner's AOL.
The bid offers Microsoft a "last chance" (Guardian, 15 Feb) to challenge Google's current dominance of internet advertising revenue, but even its own shareholders are far from convinced on the grounds that "taking on Yahoo would be a big distraction for Microsoft" (Observer, 17 Feb). The manoeuvring between the internet giants could herald a "potentially decisive phase of consolidation for the dotcom industry" (Sunday Telegraph, 17 Feb). Meanwhile, Jerry Yang is faced with "Bill Gates waving dollar bills and Rupert Murdoch wielding promises" (Daily Telegraph, 15 Feb), and his own shareholders increasingly keen on "the 'financial orgasm' of a deal with Microsoft" (Guardian, 18 Feb).