Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options. HOMEPAGE

AOL - Yahoo Merger NOT A Done Deal, Says Time Warner Source*

bewkespauliewalnuts.jpgA source close to AOL told us earlier that Yahoo's acquisition of AOL was a done deal.  However, another senior source at Time Warner emphatically denied this.  We apologize for the head-fake.

The two companies are still talking, the Time Warner source says, but a deal is "not imminent."

Advertisement

(Our original source expected a formal announcement tomorrow and reported the amusing sighting of a full-length Yahoo 18-wheeler semi-truck near AOL's Dulles campus.)

Some possible new variants on the already reported terms, none confirmed.

  • Yahoo may acquire all of AOL, including the access business.  This is smart, actually. The access business has real value and is tightly integrated into the content and advertising businesses.  It will also allow Time Warner to sell AOL for a less embarrassing price.  Then Yahoo can figure out what to keep and what to kill, rather than AOL doing it artificially for them.
  • Purchase price might be $8-$10 billion. For the content and ad business alone, this would be way too high. If the deal includes the access business, however, it's in the ballpark of reasonable.
Advertisement
  • No information yet on additional terms: Time Warner contributing cash, taking huge percentage of combined company, etc.

As we've discussed frequently over the past year, an AOL-Yahoo combination makes sense.  By merging communications (email/IM), content (weblogs), ad networks, search, etc., the company will become an even more powerful global platform and a more effective competitor to Google. 

Execution is crucial, however. Yahoo needs to ruthlessly eliminate redundancy and completely integrate what remains, or the merger will be a distraction and flop.  Unfortunately, Yahoo has not yet demonstrated that it has this competency.

See Also:
Jerry, Please Don't Buy AOL For $8 Billion
Yahoo About To Overpay for AOL?

Advertisement
Close icon Two crossed lines that form an 'X'. It indicates a way to close an interaction, or dismiss a notification.

Jump to

  1. Main content
  2. Search
  3. Account