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A Craaazy Week in Media

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In like a fox and out with a yodel?

Microsoft wants to buy Yahoo for $50 billion. Many have speculated that Microsoft would eventually spring for big Y, as a marriage with the online media giant increasingly appears to be the most viable option to compete with Google in the great war of search and online advertising. Always a fun rumor to kick around, but today it's being corroborated by the WSJ, and considering Google's recent snag of online ad giant DoubleClick left Microsoft with tears in its eyes, why not just do it? The market is lovin' it, shares of Yahoo are up 18 percent.

A sort of resurrection of newspaper and media entities began Tuesday with Rupert Murdoch's News Corporation's unsolicited $60/share takeover bid of Dow Jones, which publishes the Wall Street Journal, the second-largest newspaper in the U.S. circulation-wise.

Murdoch's $5 billion valuation of Dow Jones was 65% higher than its value on Wall Street at the time but its stock price immediately jumped to nearly meet News Corp's $60/share offer (as of Friday morning it is trading at $56).

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Is Murdoch crazy? Is he just obsessed in his ambition to take over the media world? Los Angeles-based News Corporation owns nearly 200 companies, including all Fox television, cable, and movie entities, MySpace, and has a 40% stake in the L.A. Kings and a smaller stake in the Lakers.

On the other hand, as this offer ripples through the newspaper industry, could it be that the rich kids like Murdoch and Sam Zell are influencing the marketplace to realize a renewed value in news? It would be a big wake-up call to the likes of LA Times' publisher David Hiller, has repeatedly claimed that the pressures of Wall Street on seeing consistent annual profits of 20-30% from Tribune newspapers is to blame for the drastic layoffs of the past two years, not to mention Trib's molasses-slow embrace and investment in new technology and latimes.com, despite the wealth of talent on Spring Street.

Could it be that newspaper companies really are like other companies and that a steady 10-15% profitability margin (nearly double that of the average Fortune 500 company) is a solid investment?

Today, takeover bid for Reuters, one of the world's largest wire and financial data services, emerged in London, the likely suitor being Thomson, the Canadian education and financial data service.

Can we exhale now?