Yahoo buys Maven Networks Video service for $160 Million

In the middle of a hostile take over bid by Microsoft and plummeting profits, Yahoo has decided to buy the online video service Maven Networks for $160 million.

The deal is apparently all part of Yahoo's plan to pull itself out of its slump and compete with the likes of YouTube.

The deal had, in fact, been on the books long before Microsoft announced that it was bidding for Yahoo.

Maven helps television and movie studios find Web sites to show their videos and manage the accompanying advertisements. It has deals with CBS Sports, Gannett, News Corp, Hearst and Sony Pictures.

Ads tied to search requests are worth big money and Yahoo has, sources say, been thinking about a search advertising partnership with Google as a way to boost its profits and thwart Microsoft's bid.

Yahoo will keep on Maven's 70 employees even as it completes plans to fire 1,000 of its own workers in other Yahoo divisions as part of a plan announced two days before Microsoft's bid.