NEW YORK (Reuters) - Rupert Murdoch's News Corp is in talks to combine MySpace and other Internet properties with Yahoo Inc to fend off Microsoft Corp's $42.1 billion bid, according to several reports.

One proposal under discussion would value the MySpace online social network at around $6 billion to $10 billion and would give News Corp a more than 20 percent stake in a combined company, according to the Wall Street Journal Web site Wednesday.

News of the discussions were first reported by the Silicon Alley Insider blog, followed by the TechCrunch blog. A proposed deal would involve a cash infusion from News Corp and an unnamed private equity fund, according to TechCrunch.

Murdoch has held on-again, off-again discussions with Yahoo over the past year. Responding to questions, Murdoch told analysts and reporters on a conference call last week that his company was not interested in bidding for or pursuing any transaction with Yahoo.

News Corp declined comment on Wednesday. A Yahoo spokeswoman also declined comment on the report and reiterated the company's position that its board of directors continues to explore its options.

"It is hard to imagine that Rupert would be willing to put enough cash in the deal to make it interesting to Yahoo shareholders," RBC Capital Jordan Rohan said.

Yahoo shares were up over 1 percent at $29.89 while Microsoft shares were up almost 2 percent at $28.89. News Corp shares were down less than 1 percent at $19.19.

(Reporting by Kenneth Li and Eric Auchard, editing by Gerald E. McCormick)

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