News Corp. rules out bidding war with Microsoft over Yahoo

From the moment Yahoo received Microsoft's surprise takeover bid, the web company scrambled to find a way out. We reported a month ago that News Corp. had its eyes set on Yahoo and could attempt to bail the firm out by striking a deal that would combine Yahoo with MySpace—the social networking firm News Corp. pocketed three years ago.

However, according to a Reuters report, News Corp. chairman Rupert Murdoch has now ruled out a bidding war between his media conglomerate and Microsoft over the web firm. At the Bear Sterns media conference, Murdoch simply told investors, "We're not going to get into a fight with Microsoft, which has a lot more money than us." With Yahoo having refused Microsoft's initial bid, many analysts expect Redmond to make another offer, and Murdoch's statement leaves only Time Warner as a potential alternative bidder.

Microsoft seems certain it can pull the acquisition off, because the company is already discussing its post-buyout plans with the press. Another Reuters report quotes Microsoft Chief Software Architect Ray Ozzie as saying Microsoft is "very optimistic" it can achieve the "main goals" of its proposed deal with Yahoo, but that it doesn't want to rush a merger. Reuters paraphrases Ozzie's statement, saying that Microsoft must concentrate on "not disrupting the experience of Internet users and advertisers, rather than on racing to get all the financial and other benefits from a consolidation of the two companies' operations."

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