Potential Yahoo! and MySpace Merger
Rupert Murdoch via his News Corp. is discussing swapping social networking site MySpace (MySpace.com) for a 30% stake in Yahoo! (Yahoo.com).
News Corporation has discussed swapping MySpace, its internet social networking unit, with Yahoo! in return for a 30 per cent stake in the enlarged group.
The discussions remain tentative and could collapse after the departure of Terry Semel as Yahoo!’s chief executive and his replacement by Jerry Yang this week. Mr Yang, co-founder of Yahoo! and incoming chief executive, yesterday pledged to “dig in� to his new role, and acknowledged the difficult task he faces to arrest the decline in the internet portal’s shares.
So if this potential deal works out then how much would Murdoch make on his MySpace investment?
A deal would demonstrate a remarkably swift return on News Corp’s investment in MySpace, which it acquired for $580 million in summer 2005.
Yesterday Yahoo! was worth $37 billion. A quarter stake in an enlarged company would be worth $11.1 billion.
Approximately $10.5 billion dollars in less than two years!
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