Yahoo! Talking Merger With AOL

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Yahoo! Talking Merger With AOL

Following all the hullabaloo after the Yahoo! board of directors refused Microsoft’s offer to buy them over, and the threats led by investor Carl Icahn, to replace the entire board of Yahoo!, the headless chicken that is Yahoo! is now looking at merging with another collossal sinker, AOL.

When the newly constituted Yahoo! board met for the first time, one of the major points on their agenda was to settle the matter of whether or not to proceed with discussions with Time Warner, for the possible purchase of their Internet arm, AOL, which Time Warner has wanted to get rid of for a while now.

The board has been given the go ahead to pursue the matter with Time Warner, but no negotiations have taken place yet according to sources.

The two companies had been in discussions with each other over this matter earlier, but failed to reach a settlement then.

If Yahoo! And AOL can reach an understanding, it might help to improve their position in the Internet advertising and content market, but more importantly, such a deal is likely to dissuade any future takeover attempt by Microsoft, who have also shown an interest in AOL. As things stand,

Microsoft is certainly in a better position to pay a much higher amount than Yahoo!, which would be the bottom line for Time Warner. However, a Microsoft-AOL merger would do absolutely nothing for the software giant’s search marketing business, and such a move would be nothing but a petty attempt to get back at Yahoo!
Interestingly, in an interview with CNBC last Friday, Mr. Icahn still felt that eventually Yahoo! would have to “do something” with Microsoft or Google Inc. would “kill” the company.