Yahoo! Holds out for a Better Deal as Newscorp Circles

Jerry Yang, the chief executive of Yahoo, explained his company’s rejection of Microsoft’s buyout offer in a letter to shareholders late Wednesday outlining why he believed the bid, initially valued at $44.6 billion, was too low.

“We have a huge market opportunity — and are uniquely positioned to capitalize on it," Mr. Yang wrote. “The global online advertising market is projected to grow from $45 billion in 2007 to $75 billion in 2010. And we are moving quickly to take advantage of what we see as a unique window of time in the growth — and evolution — of this market to build market share and to create value for stockholders."

Rupert Murdoch's News Corporation is reportedly in talks with Yahoo about a possible deal that would stave off an approach from Microsoft.

The Wall Street Journal said that News Corp was eyeing a move that would see MySpace and other of Murdoch's web interests merge with Yahoo.

Yahoo would give News Corp 20% of its shares under the alleged deal, allowing it to remain independent.