Can Yahoo Ignore Murdoch's "Friend Request?"

Implications: Murdoch's having fun while thinking big and moving at internet speed.  Yahoo needs to do something different--fast.  Facebook, meet checkbook.

Analysis: While "traditional media" is imploding and old "new media" companies are having a crisis of faith, only Rupert Murdoch seems to be truly having fun.

Murdoch loves to mix it up – he’s the one person doing three crucial things well right now:

1) Moving at internet speed
2) Thinking global
3) Displaying the confidence that others clearly lack

MySpace was a great investment that has already paid off big for News Corp and was immediately validated by the ad sales deal with Google.  In the supposedly fickle world of social networking sites it is still plays the role of the restaurant no one goes to any more because it's always so crowded.

Murdoch knows, with the hand he's holding, he can't lose.  He already owns MySpace.  But he's willing to trade it for a chunk of Yahoo.  Maybe he'll be adding Dow Jones (along with the Fox Business Channel) to his portfolio soon.

Yahoo still has to figure out what it is: portal? media company? entertainment company? inventor of new things? tired runner looking for a second wind?

So a deal with Murdoch offers Yahoo things they might like: MySpace gives a burst of energy.  News Corp helps extend its portal/entertainment lifespan.  From the ad sales and marketing point of view, a Yahoo-News Corp partnership would create some powerful new revenue-driving opportunities.

Buying Facebook is a legitimate Plan B: Keeps Yahoo independent. Restores a certain cool factor.  Gives new CEO Jerry Yang an instant story for Wall Street.

Meanwhile, Facebook is still operating in the fickle world of social networking sites.  Maybe they're growing. Maybe they're cooler, more sophisticated than MySpace.  Maybe they think they can go it alone.

But if they don't get bought now, one of those other social networking sites snapping at their heels likely will.

And when all the deals get done, if Facebook hasn’t been sold, will it be in a position to compete?