The Times is reporting that News Corp is in talks with Yahoo to potentially sell MySpace (and possibly other assets, like IGN) for a 30% stake in the search giant.

News Corp purchased MySpace for $580 million and IGN for $650 million back in 2005. The stake in Yahoo would be worth $11.1 billion based on Yahoo’s valuation of $37 billion yesterday.

It’s clear Yahoo wants to break into the social networking arena, after numerous failed attempts to purchase Facebook, the most recent of which was for $1 billion last year.

I simply don’t see Yahoo accepting this deal, as even News Corp CEO Rupert Murdoch knows people are flocking to Facebook. Why would take MySpace, which is starting to lose it’s hype, for such a large stake in the company?

Numerous phone calls to News Corp and Yahoo have yet to be returned but it is still early.

Update: News Corp and Yahoo both returned my calls with an expected, “No comment.”