Rupert Murdoch confirmed during News Corp.’s analyst call that he was not planning on bidding on Yahoo!
No wonder: Google is guaranteeing him $900M via Fox Interactive Media. Yahoo! used to power those very same text ads via Overture and when the deal came up for the right to power MySpace’s search, Yahoo! did not even lobby for the business.
Translation: Yahoo! would never be able to generate that kind of return for him.
Does Murdoch wish he could get all of Yahoo! for 25% of MySpace? Of course.
But is he crazy to trade off $900M in guaranteed revenue from Google to instead acquire Yahoo! for $45B?
Are you crazy? Frankly, Murdoch is so smart that he welcomes a MSFT acquisition of YHOO. Why? Because it makes Google price MySpace’s inventory at a premium.
Update: I am relinking to a post I did when the deal was announced analyzing whether or not Google overpaid.
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February 5th, 2008 at 5:18 am
“Translation: Yahoo! would never be able to generate that kind of return for him.”
I think you need new translation software. That should read ‘Yahoo! would never go that far underwater for him.’ Google missed their latest financials because MySpace was grossly underperforming and their paying through the nose. This albatross is killing their stock price.