Day by day Yahoo is much more behind Google. Google has Feedburner, Google has Youtube, while Yahoo is waiting scared in a corner. But rumors say that they’ve engaged in discussions with Fox to acquire Myspace.com for 25% of the combined entity shares.

Myspace was worth $10 billion late last year, and is worth at least $12 billion today so imagine how much money (or shares) would Yahoo give up at. I am sure for Fox this would be a great deal since they only invested $580 mil in Myspace, but would it be such a good deal for Yahoo? Think of the quality of users on Myspace: full of perverts, illegal stuff and related.

Michael Arlington believes that Myspace is going down the slope, and I agree. I don’t think that the increased number of page views and users is a good reason to pay $12 billion dollars. I think the rumor will not confirm, but if it does, Yahoo just made the first mistake in the chess game. From what I see if Yahoo really needs to buy something now, why not look in the Facebook direction? It is much cheaper (maybe $2-$3 billion dollars) and they really seem to be on an upward slope. Check up this chart from Compete.

How abut “MSN buys Yahoo for ….. “? I think this would be the best solution in 2008 to run closely behind Google, if not in front.