RUPERT Murdoch's News Corp is discussing swapping Internet site MySpace for a 25 percent stake in Yahoo Inc, The Times newspaper reported yesterday.

The Times, which is owned by News Corp, said its parent was looking for exposure in a larger Internet-based business such as Yahoo.

News Corp spent US$580 million to buy MySpace in 2005, Bloomberg News said.

Based on Tuesday's closing share price, Yahoo was worth US$37 billion.

Yahoo has been losing out to Google Inc, whose shares have risen six-fold in value since 2004 while Yahoo's share price has dipped. Profit at Yahoo fell 11 percent in the first quarter, the company said on Monday, and it warned that second-quarter results may be at the low end of expectations.

The downturn has fueled speculation that Yahoo might consider combining with eBay Inc or MySpace.