February 10th, 2008
Yahoo running to AOL to avoid Microsoft?
The Times of London is reporting that Yahoo is talking with Time-Warner about merging with AOL. It’s not clear that such a union would result in reversing Yahoo’s streak of quarterly profit declines. Of course, there is a hat trick somewhere in the complexity of relationships among all the players. Google owns 5 percent of AOL and “enhances” AOL search results. Yahoo and Google have been reportedly talking about Google taking over Yahoo search ads. So you could have AOL and Yahoo merging their media businesses and services and Google as the search/ad engine.
It’s hard to see how this bit of financial triage and merger of unequals could be a better deal for Yahoo shareholders than a sweetened Microsoft offer. The big winner would be Google, with more share of search and ads as it continues to build a more competitive portal and services to compete against Yahoo, AOL and Microsoft outside of search.
Dan Farber, editor-in-chief of CNET News.com, has more than 20 years of experience as an editor and journalist covering technology. See his full profile and disclosure of his industry affiliations.
