A News Corp.-Yahoo deal, which was a long-shot to begin with, got even more distant today. Asked, in a roundabout way, about the possibilities of a MySpace for Yahoo (YHOO) equity swap, Rupert Murdoch gave a roundabout answer: “We’re not going to get into a fight with Microsoft, which has a lot more money than us.”
Many of the news outlets covering Rupe’s appearance at the Bear Stearns conference have read his comments as definitive proof that News Corp. (NWS) is no longer pursuing a deal. We think it’s a bit less than that. While Rupe is entertainingly free-wheeling at these events, he also tends to parse his words fairly thoughtfully. Note what he didn’t say: “We are no longer pursusing any sort of deal with Yahoo.”
We think that’s telling. Asked about a potential Yahoo deal all the way back at NWS’s Q2 conference call, he dismissed the idea — but not entirely: “I think that day has passed but you never know,” he said. And in fact Yahoo and NWS were indeed chatting about the idea. We think the odds on this deal are very very low indeed. But we wouldn’t close the betting books just yet.