Minutes after Virgin announced a $6 billion bid for Dow Jones, Microsoft jumped into the fray with a $7.5 billion bid.
Virgin thought it had the deal locked up when it trumped a $5 billion bid from Rupert Murdoch's News Corp. But it turns out that Microsoft founder Bill Gates had been working behind the scenes with a number of members of the Bancroft family, which controls Dow Jones, as well as with Dow Jones CEO Richard Zannino.
The Microsoft bid is dramatically higher than the Virgin and News Corp. bids, valuing the proposed acquisition at double what most investors say the company is really worth.
Gates sought to reassure Microsoft shareholders, noting that "there are tremendous opportunities to put Dow Jones content to work in the digital world." A Microsoft insider said that Dow Jones content, including The Wall Street Journal, would be incorporated in Windows Vista. Gates refused to confirm that rumor, but he also noted that the price was "trivial" when compared with his company's cash pile.
There was no word from Virgin on the Microsoft offer, but Rupert Murdoch did answer his phone and said that he would not be bidding further, saying "I'm out!"
More details on the Virgin bid can be seen at our earlier story: Virgin Outbids News Corp. for Dow Jones
Also, for an update on this breaking story, see a newer story at: Google Outbids Microsoft for Dow Jones