BoomTown has confirmed a report by Nikki Finke of Deadline Hollywood Daily that former AOL head Jon Miller is set to take over as digital head at News Corp., replacing Peter Levinsohn.

The move was also mentioned in a blog post by Miller’s partner in an investment company, Ross Levinsohn, who once held a smaller version of the job Miller is taking.

But Miller has not actually signed up for the job officially, since he is still under a noncompete agreement with Time Warner from his AOL stint. It runs out in three days, in fact.

As some might recall, Miller was barred from taking a board seat at Yahoo last year by Time Warner CEO Jeff Bewkes.

But sources said News Corp. is likely to announce Miller as head by Monday or Tuesday at the latest.

Once he does sign, which seems likely, Miller will become News Corp.’s chief digital officer, reporting directly to the media giant’s head, Rupert Murdoch. Based in New York, he will also be chairman and CEO of the newly created News Digital Media group.

Sources noted that this is a a different and larger platform for Miller, bigger than just the Fox Interactive Media job that Levinsohn held. It will go across all properties held by News Corp. across the globe.

“The idea is to mainstream the digital initiatives, which have been all over the company,” said one source close to the situation.

Levinsohn will move to another job within News Corp. (NWS) at the film and television studios, to coordinate delivery of its assets on mobile and digital platforms, sources said. It will be his task to create sustainable business models in this fast-moving arena.

News Corp. has, in fact, been searching for a new digital head for the past several months, talking to a number of well-known Internet execs, including Joost head Mike Volpi, former AOL exec Jim Bankoff and former Facebook exec Owen Van Natta.

The decision to rejigger News Corp.’s digital assets came after the announcement that President and COO Peter Chernin was leaving his job and has largely been pushed by Murdoch.

Previously, Chernin had been in charge of digital efforts at News Corp.

The search for the position was, in fact, conducted by well-known head tech and media headhunter Jim Citrin of Spencer Stuart.

Ironically, Miller is still essentially taking a job once held by his current partner, Ross Levinsohn, at the investment fund, Velocity Interactive Group. As I noted above, Levinsohn confirmed the Miller offer from News Corp. in a blog post called “Thunderclap.”

The move is a fascinating one, and one of many in the digital arena of late among its top execs. Former Google (GOOG) exec Tim Armstrong recently took over as CEO of the Time Warner (TWX) online unit AOL, for example.

Also, even though the job will cover all the the many News Corp. Web properties, even more compelling will be how Miller will deal with its largest and most prominent asset: social-networking giant MySpace.

More to the point, it will be riveting to see how he will handle managing MySpace co-founder and CEO Chris DeWolfe.

Both previous FIM heads, Ross Levinsohn and Peter Levinsohn, many sources said, had to deal with DeWolfe’s own sphere of influence within News Corp., especially his close ties to Murdoch. Both FIM and MySpace are located in Beverly Hills, Calif.

Relations between DeWolfe and both those execs could be described, at best, as tense.

But Miller, who is a much bigger Internet player in his own right, with a more powerful charge from Murdoch, certainly is likely to shift that balance of power.

More to come…

(News Corp. owns Dow Jones, which owns this Web site.)

The stock seesaw for Yahoo–fueled this time by a story in The Wall Street Journal claiming that former AOL CEO Jon Miller was seriously buttonholing private equity firms for money to buy the Internet giant–continues.

Yahoo shares rose seven percent due to the report, to $11.50, up 76 cents.

Unfortunately for everyone but stock manipulators, the Journal story had a lot of problems, including the highly pertinent fact that Miller has not been actively working on such a deal with any more effort that he had been over the last six months.

The Journal was basically correct that the idea of buying Yahoo (YHOO) has long intrigued Miller, who has not particularly hidden that sentiment, for a long time.

In fact, it is an idea that has drawn interest from many in the media and Internet space.

That is, except Microsoft (MSFT), which many investors still hope will revisit its failed takeover bid for Yahoo.

While a Microsoft spokesman would not comment yesterday, top sources there said they had not been working with Miller on such a deal. The Journal obliquely suggested the software giant might be involved.

Finally, while the Journal did call the Miller effort “informal,” it is actually even more casual than that. No money has been raised and Miller–along with his partner, Ross Levinsohn, in the Velocity Interactive Group–has not been mounting the kind of organized campaign described in the Journal, said several sources.

“Nothing is different now than it was last week, or even months ago,” said one person close to the situation. “It’s a mystery why that story came out now and who would put this out.”

While sources close to the situation BoomTown spoke to today also noted that Miller and Levinsohn have been in many meetings with potential investors about Yahoo, most of those people have sought them out rather than vice versa.

And none of the talks has been serious, as the pair have mostly been spending their time raising a $300 million fund for Velocity.

“When someone asks for a meeting to discuss investing in Yahoo and is credible, it’s not unusual to meet with them,” said one source close to the situation. “There have been a lot of conversations for a long time, but it ebbs and flows and most lead nowhere.”

That’s been especially true since the economy has collapsed and the credit markets have dried up, making it hard for anyone to raise the tens of billions of dollars it would cost to buy Yahoo or any company whose shares have waned.

The prices mentioned by the Journal were also unusually high, from $20 to $22 a share for Yahoo, or $28 to $30 billion in total. That is almost double its recent valuation.

“Anyone would love to get Yahoo for a bargain, but it is a complex and troubled situation too, so it’s also hard to pin down anyone to truly put up the money,” said another source. “No one can put it together and no one would at those prices either.”

But Yahoo remains an enticing target, despite its troubles, given its huge Web traffic and panoply of attractive online assets.

That’s been especially true as Yahoo’s shares have dropped well below $10 a share, from close to $30 earlier this year.

And Miller would be well positioned to take on a Yahoo deal, if it were possible. He has been mentioned as a candidate in its recent CEO search, after current CEO Jerry Yang announced he was stepping down.

Miller was also the choice of Carl Icahn, when the activist shareholder was waging a proxy fight against Yahoo, to lead it. It was a scheme that never panned out, mostly due to Miller’s indifference.

Miller was later Icahn’s top choice for a Yahoo board seat–Icahn got three after he settled with Yahoo and is now on its board.

But a noncompete agreement with Time Warner (TWX), which fired Miller abruptly from AOL several years ago, was enforced by the company, preventing Miller from becoming a director.

That noncompete is in place until the end of March, which would present yet another obstacle to Miller leading Yahoo.

Several sources said Miller has discussed interest in figuring out how to revive Yahoo with Icahn many times and they serve on a board together. But Miller has not discussed it formally with Yahoo leaders or made an kind of approach to the company.

What is most intriguing about the Journal story is why it would appear now, except that dubious Yahoo rumors have become too common of late, all of which have been debunked.

Just last weekend, for example, an inaccurate report appeared in the Times of London that, ironically, had Microsoft and Yahoo in a convoluted search deal, with Miller and Levinsohn as the picks for co-CEOs. All parties mentioned in that full-of-holes report denied it was true.

Full disclosure: Both the Times and the Journal, as well as this Web site, are owned by News Corp. (NWS).

And the media giant has–in the last year–been deeply involved in discussions with both Microsoft and Yahoo about potentially doing various kinds of deals and partnerships with its interactive assets, including MySpace.

In another micro-move in the fight between activist shareholders and CNET, the Delaware Supreme Court has given the thumbs-up to a lower court ruling that the Jana Partners group can nominate a slate of directors to the board of the San Francisco-based tech news and reviews site.

CNET (CNET) has been fighting these efforts by Jana–along with Sandell Asset Management, Alex Interactive Media, Spark Capital and Velocity Interactive Group–to nominate two directors and expand the board and add more of their own nominees–claiming it was contrary to its bylaws.

Apparently not!

What does this mean? Of course, that’s not clear at all, since Jana cannot force other shareholders to help them get what they want.

In fact, some other CNET shareholders I have queried recently seem nonplussed by either side in the fight over the future direction of CNET.

But while the mano-a-mano between the pair is certainly not as fast-moving as the Yahoo-Microsoft-and-now-Carl Icahn! mess, it has had some action.

On April 1, for example, Jana issued a testy report about the company, noting:

“CNET’s current leadership now claims it can reverse course and begin creating shareholder value, but we believe they have offered no evidence that they can do so. Despite years of shareholder value destruction, CNET’s leadership during this time failed to act on the urgent need to make fundamental strategic and operational change, instead pursuing a failed expansion strategy even as CNET fell further behind. CNET’s leadership did not even start examining the basics of improving performance until we called for change, both publicly and directly with CNET’s Board of Directors.”

CNET, natch, disagreed: “CNET Networks added that while it welcomes the views of its stockholders, after a preliminary review, the white paper contains numerous misstatements and is misleading in many respects. The Company will respond in due course.”

Of course, BoomTown is poised to head over to CNET’s Second Street HQ to video-query CEO Neil Ashe tout de suite.

Neil, we’re waiting by the phone!

Who in the Internet sector hasn’t enjoyed the always amusing stylings of Mr. Ross Levinsohn, the high-profile former head of Fox Interactive Media a.k.a. “The Guy Who Bought MySpace for News Corp.”?

Today, he added another song to his silky smooth repertoire as the “Internet guy who dissed Yahoo.”

In a nice scoop, TechCrunch reported that Levinsohn was going to be a nominee to the board that Microsoft (MSFT) has been forming as part its potential proxy fight to take over Yahoo (YHOO).

That’s true, several sources have told me. Levinsohn, who was recruited by Microsoft’s Yusuf Mehdi, has even filled out paperwork as part of the process.

And once the i’s are dotted and the t’s crossed, that makes him the highest profile Internet figure on the board, which is made up of–let’s just say it, shall we?–pretty unimpressive former execs, none of whom has had any substantial Internet experience.

While many well-known Web figures were approached by Microsoft, few in Silicon Valley have been willing to be part of an effort to snuff out an independent Yahoo, one of its most important and iconic brands.

Not so the entrepreneurially inclined Levinsohn, apparently, who has a maverick nature.

He left FIM in 2006, for example, after deciding he wanted to be more than an overpaid employee of Rupert Murdoch and Peter Chernin.

Now, the Los Angeles-based Levinsohn runs an investment fund called Velocity Interactive Group with former AOL (TWX) head Jon Miller. Armed with $1.5 billion, the investment focus of the new enterprise will be on digital media and communications.

Given possible News Corp. (NWS) involvement as a possible partner in the Microsoft deal (more on that later), including a desire by Murdoch to spin MySpace into Yahoo, it’ll be interesting that Levinsohn might now have some power over his former bosses.

Or not. Most expect the board to be a rubber stamp for Microsoft, although several sources say those asked have been told that they can vote in the way they think is best for Yahoo.

Kind of like superdelegates! Except geekier!

Here is a video interview I did with Levinsohn in December of 2007, where he talks about the future of digital media on the Web, as the tech and entertainment industries and its many players seek to figure out how to make the painful digital shift and find new monetization plans that will replace crumbling old-media businesses.

At the end, months before Microsoft’s unsolicited bid for Yahoo was launched, after I asked him what will be coming, the psychic Levinsohn eerily predicted: “Something happening with Yahoo, I think, this year.”

Something indeed.

Here is the video: