Forget Yahoo-AOL. Sources tell us that a Yahoo merger with News Corp is more likely.
Seems plausible to us.
For one, Yahoo just hired Ross Levinsohn as its EVP in charge of corporate development. Ross is a News Corp veteran who’s last job was working as a VC with Jon Miller – the guy currently running News Corp Interactive. Ross isn’t moving to Sunnyvale for his new gig, either. He’s staying in Los Angeles – News Corp Interactive’s home city.
For another, people who usually knock down this kind of talk aren’t doing it with their usual fervor.
One source close to News Corp says the company is monitoring the situation, and notes that Jon Miller and “Chief Yahoo” Jerry Yang have a good working relationship. Merger talk, says this source, is pre-mature.
Another source close to News Corp executives tells us that the company gets all the same calls from private equity and “other players” encouraging it to take a long look at a Yahoo–News Corp Interactive tie-up – “but [News Corp] hasn’t made a move.”
Does that mean News Corp doesn’t plan to pull the trigger?
“I don’t think that is the inference,” says our source. “Just nothing done yet.”
Pretty much all of our sources agree with how one of them described the situation, telling us that “no one on either side seems to think [the deal is] imminent. Or even realistic.”
“But no one hates the idea.”
That doesn’t sound like much, but it’s good enough to put Yahoo-News Corp way ahead of Yahoo-AOL.
Everyone keeps reporting that AOL could join with private equity firms to buy Yahoo. We think this scenario is implausible. There are a number of reasons. They include difficulties presented by Yahoo’s Asian assets, Big Purple’s disdainful view of AOL (“A melting ice cube”), and a couple change-in-control poison pills left over from the Microsoft merger talks (including full salaries as severance pay for anyone who wants to quit for “good reason”).
A source close to Yahoo tells us neither Yahoo CEO Carol Bartz nor Yahoo’s board are currently reviewing or soliciting merger proposals from anybody.
Yahoo declined to comment for this story. So did News Corp.