That's what Peter Kafka is hearing over at Silicon Alley Insider. Rupert Murdoch is probably not interested in an outright acquisition, but what about some sort of swap in which News Corp. hands off MySpace and other Fox Interactive properties in return for a major equity stake in Yahoo? The idea would be for News Corp.'s stake to become Yahoo's poison pill, making a hostile bid much less attractive to Microsoft. Kafka was told by two sources that News Corp. and Yahoo are still discussing a possible transaction. Seems like a long shot, but you never know.

Actually, MySpace would be an interesting twist for Yahoo, which seems to have abandoned its ambitions to be a serious Hollywood player. Remember just a few years back when the company moved to Santa Monica and hired a bunch of show biz executives, led by the former ABC programmer Lloyd Braun? Well, Semel and Braun are long gone – as are a bunch of others on the programming side. The irony, of course, is that original Web programming is now all the rage. This might have been a case of a good idea that came a little too early – and then executed by the wrong company. Yahoo had become so big and unwieldy that there were turf battles breaking out between the Hollywood people in Santa Monica and the tech people in Sunnyvale.