NEWS Corp.

Yahoo! in Talks About Investing in Murdoch's News Corp. Satellite Business
By Karen Fessler

Yahoo May Take a Stake in News Corp. Satellite Unit (Update3)

(Adds currency conversion in third paragraph; adds European
trading in 11th paragraph.)

New York, Feb. 28 (Bloomberg) -- Yahoo! Inc., the biggest
Internet search service, is in talks to take a minority stake in a
company that News Corp. is creating to hold its satellite-
television assets, a person familiar with the discussions said.

News Corp. President Peter Chernin and Yahoo's co-founder,
Jerry Yang, have held preliminary meetings, though nothing has
been completed. An agreement, if any, isn't expected until about
April, the person said. The New Yorker magazine reported in its
March 6 edition that the two executives have been discussing a
``wide-ranging alliance.''

News Corp.'s ordinary shares surged A$1.143, or 5.1 percent,
to A$23.40 (US$14.35). The stock has gained 58 percent this year
as investors have bet the company's assets are undervalued and on
hopes a sale of shares of News Corp.'s satellite assets will boost
the value of News Corp.'s assets.
``I wouldn't be surprised to see a tie between News Corp. and
a number of other media companies that could include Vivendi,
Microsoft, Yahoo and DirecTV,'' said Peter Shorthouse, a Warburg
Dillon Read Australia Ltd. media analyst who has a ``strong buy''
recommendation on News Corp. ``News Corp., with its satellite
platform in the making, holds the aces.''

News Corp. and Yahoo already have a marketing alliance, and
investors have speculated the two companies may broaden the ties,
especially after America Online Inc. last month agreed to buy Time
Warner Inc. News Corp. could give Yahoo broad distribution through
its global satellite-TV business and provide content such as
films, TV programming, and newspaper and magazine articles to
Yahoo's Web sites.

Officials at News Corp. and Yahoo declined to comment.

Satellite Selloff?

Sydney-based News Corp. earlier this month said it was
considering combining its satellite-TV businesses and related
holdings into a separate company that may be publicly traded. It
said at the time that it was too soon to discuss the makeup of the
company, including potential investors.

It's likely that other companies besides Yahoo will invest in
the satellite affiliate, the person said.

News Corp. Chairman and Chief Executive Rupert Murdoch, in an
interview on his company's Fox News channel earlier this month,
said that he would ``welcome'' Yahoo as a shareholder and that his
company could help distribute Yahoo's Internet search service over
News Corp.'s media properties.

News Corp.'s American depositary receipts have risen about 22
percent since AOL agreed to buy Time Warner on Jan. 10 in a
transaction valued at $152 billion. News Corp.'s ADRs rose 1/4 to
55 1/8 Friday. Analysts and investors now have turned their focus
to News Corp. and other media giants such as Seagram Co. and Walt
Disney Co. to see how they will react.

Yahoo for Independence

In European trading, Yahoo shares fell 1 to 164 3/16, in line
with the market, according to Madoff Securities International.

Still, Yahoo said after the AOL-Time Warner combination was
announced that it wasn't interested in joining with a traditional
media company, though it would form partnerships when needed and
would consider strategic acquisitions.

Yahoo Chief Executive Tim Koogle said Jan. 11 on a conference
call to discuss the company's earnings that his company doesn't
need to own traditional media content or distribution systems. The
biggest effect of the AOL-Time Warner transaction would be media
companies' acknowledgement that they have to be involved with the
Internet, Koogle said.

News Corp. already has been busy making investments in the
Internet, including a $1 billion stake in Healtheon/WebMD Corp.
The investments have drawn support from shareholders, some of whom
earlier had been concerned that News Corp. wasn't being
sufficiently aggressive in expanding on the Internet.

News Corp. also agreed to invest $1 billion in Singapore
Telecommunications Ltd., the New York Times reported, citing
executives close to the talks. The paper said the investment will
let the city-state's biggest phone operator boost its offer for
Cable & Wireless HKT Ltd.

News Corp. will establish an Internet, television and mobile
telephone venture in Singapore similar to one it already formed in
Hong Kong with HKT, the Times said. SingTel surged 3.4 percent
after the report.