Yahoo is discussing a possible partnership with News Corp. in its latest effort to repel Microsoft or prod its unsolicited suitor into raising...

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SAN FRANCISCO — Yahoo is discussing a possible partnership with News Corp. in its latest effort to repel Microsoft or prod its unsolicited suitor into raising its current takeover bid, according to a person familiar with the talks.

The specifics of the joint venture still hadn’t been worked out, said the person who didn’t want to be identified because of the sensitivity of the matter.

Both The Wall Street Journal and a prominent blog, TechCrunch, reported today that News Corp. is interested in folding its popular online social network, MySpace.com, and other Internet assets into Yahoo — an idea that first came up last year. News Corp. owns The Wall Street Journal.

News Corp. and a private-equity firm also would buy significant stakes in Yahoo in a complex deal designed to boost the Sunnyvale, Calif.-based company’s market value above Microsoft’s initial bid of $44.6 billion, or $31 a share.

A Yahoo spokesman said the company continues to “carefully and thoroughly” evaluate alternatives that will enrich its long-term shareholders.

News Corp. spokeswoman Teri Everett declined to comment. Microsoft also had not comment.

Although News Corp. Chairman Rupert Murdoch made it clear in a conference call last week that his New York-based company had no interest in an outright acquisition of Yahoo, he didn’t rule out the possibility of a deal involving MySpace.

Yahoo rejected Microsoft’s offer Monday, insisting that its Internet franchise is worth more money. Microsoft has held firm on its bid so far, dubbing it “full and fair” while threatening to launch a hostile takeover attempt.

Besides talking with News Corp., Yahoo has explored an advertising partnership with its biggest rival, Internet search leader Google.

Although Google probably could help elevate Yahoo’s recently drooping profits, the alliance would likely face antitrust hurdles because the two companies operate the Web’s two biggest ad networks and eliminating one would reduce competition.

If Yahoo is able to work out a deal with News Corp., analysts believe Microsoft will simply raise its offer because it needs the acquisition to counteract Google’s dominance of the online ad market — a battleground that is rapidly reshaping the technology and media industries.

“Buying Yahoo makes tremendous sense for Microsoft, more sense than any other company in the world,” said Ken Marlin, a New York investment banker specializing in media and technology deals.

Associated Press business reporter Seth Sutel in New York contributed to this story.