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In the mating dance of elephants, certainly some smaller animals underfoot are sure to be hurt. Despite this truism, newspaper publishers seem somewhat sanguine about the unsolicited offer Microsoft Corp. made to Yahoo! Inc. late last month. Early today, Yahoo rejected Microsoft's $44.6 billion offer but left the door open for further negotiation.

Analysts are concerned about the merger because 19 publishing companies are linked up in an on-line classified ad consortium with Yahoo, while dozens of others are linked in another classified on-line system,, which is four-percent owned by Microsoft.

Gary Pruitt, chairman of The McClatchy Co. -- which participates in the Yahoo consortium and is a minority shareholder in CareerBuilder -- told analysts last week that Yahoo has met with publishers and the consortium rolls on.

"It is moving forward as planned," Reuters quoted Pruitt as saying.

"We have a contract with Yahoo and if things went in a bad direction as a result of any deal with any third party, we would have the right to terminate that contract," he said.

Other publishers in the Yahoo consortium include A.H Belo Corp. of Dallas, Calkins Media Inc., Cox Newspapers of Atlanta, The Hearst Corp. of New York City, Journal Register Co., Lee Enterprises, Media General Inc. of Richmond, Va., MediaNews Group Inc. of Denver, Morris Communications Co. LLC of Augusta, Ga., Paddock Publications Inc. of Arlington Heights, Ill., and The E.W. Scripps Co. of Cincinnati.

Microsoft took a four-percent position in CareerBuilder last May; the controlling partners, Gannett and Tribune, each own 40.8 percent of the company, while McClatchy owns 14.4 percent. At the time of the investment, none of the parties revealed what Microsoft paid for its piece of CareerBuilder.

Wouldn't it be ironic if a merger between two high-tech companies were to somehow fulfill the dream of getting all of the newspaper business' on-line classified operations onto a single platform, where a customer could easily place an order into a dozen papers in every region of the country without blinking an eye?
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Date:Feb 11, 2008
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