SAN FRANCISCO — News Corp.’s Rupert Murdoch has a $5 billion crush on the owner of The Wall Street Journal, Reuters PLC is the apple of Thomson Corp.’s eye, and Microsoft Corp., at least fleetingly, appeared to flirt once again with Internet icon Yahoo Inc.
The media mating dance that broke out last week is part of a mad scramble to find the right mix of technology, business savvy and content to remain relevant and profitable amid the sociological and economic upheaval wrought by the rise of the Web.
“Media companies are trying to adapt quickly and they are looking for some help,” said Ryan Jacob, a money manager who runs a fund specializing in Internet stocks.
Even mighty Microsoft — the world’s most valuable technology company and a catalyst in the personal computer revolution — seems uncertain about its ability to cope on its own.
How else to explain Microsoft’s brief renewal of its on-again, off-again merger talks with Yahoo?
Although neither Microsoft nor Yahoo would confirm negotiations first reported by the New York Post, some investors were hoping the couple would make it to the altar this time. Yahoo shares shot up by more than 19 percent Friday before settling back to finish at $30.98, up $2.80, or 9.9 percent.
Microsoft reportedly consider paying about $50 billion, or $35 to $37 per share, for Yahoo.
The Wall Street Journal doused the merger speculation late Friday by citing unnamed sources who said the talks of a possible combination had been terminated for the second time in a two years.
Standard & Poor’s equity analyst Scott Kessler understands why it might make sense for Microsoft and Yahoo to get together, but doubted the sheer size of their combined audience would make things any better.
“They both have a lot of users, but their problem has been translating that into higher revenue and profits,” Kessler said. “Neither has been doing it as well as Google.”
Any discussion about the media’s challenges and opportunities these days usually involves Google Inc., whose Internet-leading search engine has become the Web’s biggest moneymaking vehicle as well as an influential gateway to other online destinations.
As the operators of the second and third largest search engines behind Google, it’s logical for Microsoft and Yahoo to consider whether they would be better off trying to gang tackle the industry leader.
Even if they were to combine, Microsoft and Yahoo would still trail Google in the lucrative search engine race, according to the latest data from comScore Media Metrix. Google ended March with a 48 percent share of the U.S. search market, trailed by Yahoo at 27.5 percent and Microsoft at 11 percent, comScore said.
“This deal can’t just be about chasing Google in search because that is a losing battle,” said Forrester Research analyst Charlene Li. “It has to be about creating something more powerful, something they could do better than Google.”
As News Corp.’s audacious chief executive, Rupert Murdoch has been leading traditional media’s charge to the Internet. It factored into News Corp.’s surprising $5 billion bid for Dow Jones & Co., which owns The Wall Street Journal as well as the Dow Jones Newswires and Barron’s.
While the print version of The Wall Street Journal has been the leading U.S. business paper for years, the online edition’s ability to attract subscribers is even more compelling.
In an era where most news content on the Web remains free, the Wall Street Journal boasts 931,000 subscribers who pay between $79 to $99 annually to read the paper.
