The rumors around Fox's recent offer to swap their stake in MySpace for a piece of Yahoo got me thinking...

Essentially Fox sees the writing on the wall. They are going to be overtaken by MySpace! Maybe not tomorrow, but within the next 12-18 months. Fox is realizing they can get out of an overpriced asset (MySpace) with a massive return and trade up for an arguably fairer priced asset with more diversification. If I'm in Yahoo's shoes, I'd be very cautious. At this point, acquiring FaceBook might be a better play for Yahoo, but that price tag goes up daily.