\n\tBy Greg Peel<\/p>\n
\n\tThe world was shocked when Rupert Murdoch bought MySpace for US$600m wondering how on earth News Corp ((NWS)) would ever see a return. It wasn't long before MySpace was valued at US$6bn. Then along came Facebook.<\/p>\n
\n\tFacebook quickly and substantially rendered MySpace almost obsolete, taking social media platforms to a whole new level. Now MySpace is proving a drag on News Corp's earnings and despite relaunching with an updated look and feel this week the site is still an asset Murdoch would like to prevent further losses on.<\/p>\n
\n\tMaybe an opportunity has arisen.<\/p>\n
\n\tThe speculation in the US at present is that AOL is looking to make a takeover bid for Yahoo! In recent years Google has been to Yahoo as Facebook has been to MySpace. Yahoo's creators were nevertheless roundly criticised a couple of years ago when the company knocked back a pretty good offer from Microsoft. But as Google's dominance becomes more entrenched, perhaps now is time for the two lagging search engines of AOL and Yahoo to join forces.<\/p>\n
\n\tThe press has also raised the possibility of News Corp making an offer for Yahoo.<\/p>\n
\n\tThe analysts at BA-Merrill Lynch reject this notion, suggesting News is more likely to take a strategic stake in Yahoo than an all-out acquisition given the impact on the News' balance sheet and credit rating. However, from a minority position News may well be able to use MySpace as a bargaining chip as it could theoretically, says Merrills, be bolstered by a broader collection of online assets and traffic and advertising potential.<\/p>\n
\n\tThis might ultimately lead to a deconsolidation of MySpace's US$100m-odd drag on News Corp's FY11 earnings, suggests Merrills.<\/p>\n
\n\tIt's only speculation. Merrills retains its Buy rating on News.<\/p>\n","protected":false},"excerpt":{"rendered":"
Superseded MySpace is proving a drag for New Corp, but one broker speculates there might be an opportunity for News to lever value off a Yahoo-AOL merger.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[6],"tags":[42],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/57318"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=57318"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/57318\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=57318"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=57318"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=57318"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}