It’s like the beast that won’t go away. As long as Yahoo is in play and Microsoft keeps flubbing negotiations to buy it (or stringing Yahoo along, depending on how you look at it), AOL keeps raising its hand and saying, “What about me? What about me?” Time Warner would be happy to unload AOL to any taker—Yahoo, Microsoft, it doesn’t care. Talks may be heating up before Yahoo’s August 1 shareholder meeting, according to an unnamed source who got the story planted in Reuters, or Time Warner’s M&A team might have nothing better to do during the summer doldrums.
Time Warner has been talking to Yahoo since Microsoft first made its bid, with negotiations intensifying every now and then. The most recent round of talks started to heat up two weeks ago when it looked like a combination with AOL might be Yahoo’s only remaining option. The rationale would be cost-savings and not much else. (Citi analyst Mark Mahaney figures the combined entity could save $900 million a year and gain greater scale in display advertising).
And, as I noted back in March:
Time Warner desperately wants to salvage AOL, but merging it with Yahoo does not necessarily keep it relevant. Given its disastrous history with AOL, Wall Street may punish Time Warner if it tries to pull another Jerry Levin
That is still true. Getting rid of AOL could help its sagging stock. (Disclosure: As a former employee, I own Time Warner shares). Although, it’s not clear that Yahoo really needs the additional headache of going through a massive merger with second-banana AOL when it has more pressing issues to worry about (namely, Microsoft and frenemy Google breathing down its neck). A sale of AOL to Microsoft might make more sense, since Microsoft needs to bulk up its presence in online advertising. Buying AOL, though, doesn’t help it with search, which is the single asset Microsoft is most interested in acquiring from Yahoo.
Any renewed interest from one potential suitor, of course, would cause AOL/Time Warner to try to get a bid from the other, and that may be all that is happening here: AOL is trying to talk its price up.
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Microsoft “flubbing” the deal. Has the author of this article missed the incredibly bad decisions by Yahoo in the past few months?
I’d like to see Microsoft snatch up both AOL and Yahoo! for the same price as just Yahoo!. Not saying that is going to happen but with a combination of the 3 they may have a chance against the evil Google empire.
Clearly the solution is to form one massive anti-Google-opoly. Something like Americanmicroyahooonlinetimewarnercisco Inc.
Display ads are unwanted ads while search ads are wanted. Why don’t people see that display ads are a close keen to spam?
Mogilny – because they’re not at all like spam if you actually know what spam means?
@James
they are both unsolicited
they are both mostly ignored
in most cases, they are both un-targeted
in some cases, they are both being filtered (e.g HOST file, spam filter)
Display ads have some striking similarities to spam.
I think it’ll just be about time before more and more Yahoo shareholders get angry and rally behind Icann.
MSFT + Yahoo would be a good move in my mind, and I think an AOL + Yahoo move wouldn’t be bad either.
@Mogilny
If this is true, then why does the display ad market bring in over $10 billion a year? Clearly a lot of people are paying attention to them and even clicking on them. (According to USA today, display ads make up ~21% of the online advertising market compared to ~40% for search).
Why would anyone want AOL? I don’t see their value online these days.
If we didn’t have display ads, who will pay for the internet. Unless, you wish to allocate funds stolen from the taxpayers, by our government to pay for the websites you prefer?
I dont want Microsoft running my email. Microsoft is the evil entity here. A monopoly that bullied it way to the top and stole software to controll the market. Is that what we want to see at yahoo. Hell no. If yahoo sells out to MS, I will leave yahoo for sure. All the changes that yahoo went thru a while ago pissed me off and it did not help them at all really. And i would like to ask, Why is google so evil?