In the wake of Terry Semel leaving Yahoo and Jerry Yang stepping back in, the question is, how far will those ripples be felt. A couple of my in-the-know sources are predicting that Microsoft will buy Yahoo. And then of course there's speculation that Yahoo might combine with eBay .
But let's talk about News Corp. talking about swapping MySpace for 25% of Yahoo--which CNBC's David Faber was first to report on Monday. What would that loss mean for News Corp.? And what does it say about the fast-changing fates on the web? Does is really all come down to the fact that Facebook is so hot right now? It might.
Rupert Murdoch got MySpace for a steal--$580 million in 2005--and has since been lauded for the brilliant move, growing the site and leveraging it with his other properties. Now MySpace has been valued at some $10 billion dollars, never mind its value as a marketing tool for everything from 20th Century Fox movies to Fox TV shows.
Two weeks ago, Murdoch was quoted in the Wall Street Journal, sounding envious of the next Internet darling. Murdoch said one of the reasons he wasn't interested in The Tribune company was the decline in readership. "WSJ: They're all going to MySpace. Murdoch: I wish they were. They're all going to Facebook at the moment. (Note: correction from earlier post on time of interview from last week to two weeks ago.)
Murdoch may regret putting his money on the early leader in the race. MySpace created the social networking space, Facebook swooped in later with a hotter niche and now it has all the buzz. Now Murdoch is facing a similar issue with Yahoo. Yahoo had all the early buzz, but has since been far surpassed by Google . It's the fact that Yahoo was that early leader and has fallen so far that gives it such an appealing price.
But the question then is what would Murdoch want to do with it? Turn it into an information portal, as Semel was pushing? Would marrying the two brands help Yahoo? Or will it only further dilute MySpace? And would News Corp. lose the access to MySpace as a crucial tool? Oh, and would the folks at Yahoo even want Murdoch as such a a large, opinionated shareholder?
And this isn't just about the Internet. Could this impact Murdoch's bid for Dow Jones ? There certainly would be a lot of simultaneous changes should both go forward.
"Questions? Comments? MediaMoney@cnbc.com