Times Online reports that Yahoo might purchase MySpace for a 30% stake in the Search giant's group.
MySpace which is a social networking and video site will help Yahoo! by leaps and bounds in its battle against Google who owns Youtube. Besides, if Yahoo accepts the offer from MySpace's owner, Newscorp Yahoo! Will finally get into social networking, something it has wanted to for a long time. If Yahoo buys MySpace, it will be a small vindication after losing the bidding war for FaceBook for which Google ended up paying $1 billion. Also, MySpace is the most successful social networking site with 230,000 new users everyday. MySpace's popularity among its users-young and 1old-will be a good platform for Yahoo to better make its ads reach out to a bigger spectrum of possible customers.
On whether this move would aid Yahoo, Michael Arrington writes writes:
"Would this be a good move for Yahoo? No. There is no silver bullet for their woes. Yahoo could certainly use the massive page views and user numbers, and they could kick Google out of that search deal from last year (or also hand search over to Google, as some rumors are saying). But they need to focus on strategic acquisitions and a real game plan going forward. To try and hit one out of the park with a monster acquisition, perhaps just as the MySpace star is fading, would be monumentally stupid. Their shareholders would be much better served if they let Microsoft buy them."
Yahoo is so hellbent on toppling Google that the NYTimes reports an anonymous yahoo executive who said "ceding the search business to Google was not an option being considered now."
Imagine this, if Yahoo! purchases MySpace it would cost them 30% of stock which is equivalent to $12 billion as Yahoo's current market valuation is $37 billion. And to think that Rupert Murdoch's News Corp bought the social networking site in 2005 for a comparatively paltry amount of $580 million.
A Google share costs $ 509.97 while Yahoo's cost $27.66