News Corp not in talks with Microsoft, AOL or Yahoo

By Kenneth Li

NEW YORK (Reuters) - Rupert Murdoch's News Corp (NWSa.N: Quote, Profile, Research) has opted out of the current round of Internet consolidation for now, even as Yahoo Inc (YHOO.O: Quote, Profile, Research) investors pine for a white knight after Microsoft Corp (MSFT.O: Quote, Profile, Research) dropped its bid.

The media conglomerate is not in deal talks with Yahoo, Microsoft or Time Warner Inc's (TWX.N: Quote, Profile, Research) AOL, top News Corp executives said on Wednesday, though they did not rule out approaches down the line.

"We will always look at strategic options, but we feel very comfortable with our current positioning on the Web," News Corp Chief Operating Officer Peter Chernin said on a quarterly earnings call. "We are not in discussions with Microsoft."

Asked if News Corp was holding ongoing discussions with Yahoo or AOL, Chernin said, "I have not had a conversation with Yahoo or AOL in a couple of weeks."

"Nor have I," added Murdoch, News Corp's chief executive.

The comments appear to eliminate News Corp as an immediate suitor for Yahoo, which is under pressure to come up with alternatives after Microsoft stunned the market by abruptly abandoning a $47.5 billion bid to buy the Web pioneer on Saturday. Microsoft balked at Yahoo's asking price of $37 per share and was only willing to go up to $33 per share.

Shares of Yahoo plunged 15 percent on Monday, but have since rallied on hopes the two sides could return to the negotiating table and on expectations that Yahoo could announce a search advertising deal with Google Inc (GOOG.O: Quote, Profile, Research).

The fallout of the Microsoft bid is seen making AOL a more attractive partner for either Yahoo or Microsoft, analysts say. Some even speculate that News Corp may want to combine MySpace with AOL, as Internet companies jostle to take on dominant Google.