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00:00 GMT, Tuesday, 5 February 2008

Murdoch rules out bid for Yahoo

Rupert Murdoch

Rupert Murdoch has played down speculation that he is interested in launching a rival takeover bid for internet search engine Yahoo.

"We are definitely not going to make a bid for Yahoo," said the chairman of media giant News Corporation.

However, Mr Murdoch then added: "We are just not interested at this stage."

Yahoo received a $44.6bn (£22.65bn) takeover approach from software giant Microsoft on Friday. News Corporation was seen as a potential rival suitor.

Google's concern

While Yahoo's board continues to say it is considering its position, Microsoft says the proposed takeover would create a "strong number two competitor" to search engine leader Google.

Google

Google itself has said it finds Microsoft's unsolicited approach for Yahoo "troubling", and has called for it to be investigated by regulators.

In a blog, Google said the tie-up could unfairly limit the ability of consumers to freely access competitors' email and instant messaging services.

It said Microsoft had previously sought "to establish proprietary monopolies".

Online advertising

Microsoft chief executive Steve Ballmer counters that a combined Microsoft and Yahoo would better rival Google, and therefore create stronger competition in the market for online advertising.

"Google's clearly got a dominant position. They've got about 75% of paid search worldwide," Mr Ballmer said.

Despite Microsoft's deep pockets, the software giant has revealed it may have to go into debt for the first time to finance its $44.6bn combined cash and share offer for Yahoo.

Microsoft's proposed bid, unveiled in a letter to Yahoo's board on Friday, is 62% above Yahoo's closing share price on Thursday.

In addition to News Corporation, other firms named as potential rival Yahoo suitors are Time Warner, AT&T and Comcast.



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