Apparently, Yahoo! has got quite attractive this Valentine, though it has refused Microsoft's proposal, but there doesn't seem to be an extreme shortage of potential suiters as was earlier thought.

After, the top managements of the two companies airing their views, the shareholders too have spoken up, but the latest twist in the story is Yahoo!'s compatibility with Rupert Murdoch's News Corp.

There are talks about News Corp considering combining MySpace and other Internet properties with Yahoo Inc in an effort to keep off Microsoft Corp's bid from materializing.

One of the possibilities being explored is to value the MySpace online social network at about $6 billion to $10 billion, this would give News Corp over 20 percent stake in a merged company.

Apparently there is a proposed deal that would entail a cash inflow from News Corp in addition to a private equity fund which hasn't been named.

During last year Rupert Murdoch had intermittent discussions with Yahoo!, but just last week on a conference call he had expressed his disinterest in bidding for or pursuing any transaction with Yahoo!. Both the companies when contacted have declined to make any comments on the issue, except for a Yahoo! spokeswoman repeating their earlier stance of exploring options.

"It is hard to imagine that Rupert would be willing to put enough cash in the deal to make it interesting to Yahoo shareholders," RBC Capital Jordan Rohan said.

"Any options other than Microsoft are all fraught with serious consequences," said Sanford C. Bernstein analyst Jeffrey Lindsay. "The management has left it to so late in the day to really find any alternative. They have basically backed themselves in the corner."

In the best case scenario, there seems to be consensus that a Yahoo and Fox Interactive combo would be worth $50 billion. However, in the worst case the talks could put pressure on Microsoft to raise its bid to acquire Yahoo!.

With News Corp now coming in the picture the tussle to acquire Yahoo! continues. Despite, Yahoo!'s wishes of staying independent a merger with Microsoft's appears quite inevitable at present.

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