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Article

Title: Yahoo Steps Up Talks with Time Warner

Author: Delaney, Kevin; Marr, Merissa Article Type: Company
Source: Wall Street Journal, v251 n53 pB3(1) Publication Date: Mar 5, 2008
  ISSN: 0193-2241
URL of Publication: http://www.wsj.com

Talks between Yahoo! Inc. and Time Warner Inc. have been stepped up as Yahoo! attempts to ward off Microsoft's takeover bid. The deal under discussion would fold Time Warner's AOL division into Yahoo! with Time Warner taking a large minority stake in the combined entity. Though Yahoo! rejected Microsoft's offer as significantly undervaluing the company, many observers see a Microsoft takeover as the most likely outcome for Yahoo!. Those familiar with the talks say that Time Warner is putting together a formal proposal for the Yahoo! board and that the companies foresee approximately $1 billion in cost savings annually. The combination of AOL and Yahoo! is aimed at creating a strong contender in online advertising. Outsourcing Yahoo!'s search advertising to Google Inc., which had been discussed previously, is not part of these discussions. News Corp. is also in discussion with Yahoo! about a deal that would have News Corp. selling Yahoo! MySpace and several other sites for a stake in Yahoo!. Microsoft has until March 14 to propose its slate of directors for Yahoo!, and Yahoo! is likely trying to solidify its options before that date. Yahoo! may decide to attempt to push the March 14 date back, though it faces strong pressure from shareholders, some of whom have already sued the company for rejecting Microsoft's bid, for a quick resolution to the matter. Any talks between Microsoft and Yahoo! are likely to occur over a weekend to minimize the risk that leaked details of the conversation would affect the companies' stock prices. New Bear Stearns Cos. CEO and veteran investment banker Alan Schwartz is helping Microsoft with its bid.

Companies:
AOL LLC Google Inc
Microsoft Corp News Corp
Time Warner Inc Yahoo! Inc

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