Reuters is reporting that Yahoo is in talks on a possible deal with News Corp, but analysts said an alternative was unlikely to emerge to rival Microsoft Corp's bid for Yahoo, now valued at $42.1 billion.
News of the talks to combine their web services suggest that Rupert Murdoch's News Corp and an unnamed private equity fund would provide a "cash infusion" for the Yahoo, which is facing a possible hostile take-over bid from Microsoft.
The Wall Street Journal has reported that a deal being discussed would give News Corp more than a 20% stake in Yahoo, making it harder for the proposed Microsoft deal to go ahead.
News Corp and Microsoft declined to comment on Wednesday. Yahoo also declined to comment and reiterated the company's position that its board continues to explore its options.