News Corp. Jumps in Bed With Yahoo, Microsoft

The Microsoft/Yahoo takeover saga gained a third partner: News Corp. The New York Times reports that Rupert Murdoch‘s company would consider aligning with Microsoft to increase the company’s bid for Yahoo.

Rupert Murdoch’s News Corporation is in talks with Microsoft about joining in its contested bid for Yahoo, according to people involved in the discussions. The combination, which would join Yahoo, Microsoft’s MSN and News Corporation’s MySpace, would create a behemoth that would upend the Internet landscape.

Yahoo, in turn, will team up with arch-rival Google to possibly fend off Microsoft’s advances. In a trial that will run for two weeks, the search site will “outsource advertising space to Google as part of a short-term deal that could lead to a bigger partnership.”

Microsoft took issue with the potential of a longterm partnership between the two search giants, saying in a statement, “Any definitive agreement between Yahoo and Google would consolidate over 90 percent of the search advertising market in Google’s hands.”

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