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Yahoo, Time Warner closing in on AOL deal: source

   
2:21 am on Apr 10, 2008 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



SAN FRANCISCO (Reuters) - Yahoo Inc (YHOO.O) and Time Warner Inc (TWX.N) are "closing in" on a deal where Yahoo would merge with Time Warner's AOL Internet unit, brushing aside Microsoft's bid for Yahoo, a source familiar with the talks said on Wednesday.

The source confirmed a Wall Street Journal story saying Yahoo would receive a cash investment from Time Warner in exchange for a 20 percent stake in the combined Yahoo-AOL business. The deal would exclude AOL's fading dial-up Internet access business and value AOL at about $10 billion.

A deal with Time Warner and AOL would be part of a multi-pronged strategy by Yahoo in which it would outsource Web search advertising operations to Google Inc (GOOG.O), the source said.

Separately, The New York Times reported that Microsoft and Rupert Murdoch's News Corp (NWSa.N) are in negotiations on making a joint bid for Yahoo. That merger would join Yahoo, Microsoft Corp's (MSFT.O) MSN and News Corp's MySpace, the paper said.

Reuters [news.yahoo.com]

1:46 pm on Apr 10, 2008 (gmt 0)

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If Y shareholders approve this mess of a deal they're insane.
2:05 pm on Apr 10, 2008 (gmt 0)

WebmasterWorld Senior Member sem4u is a WebmasterWorld Top Contributor of All Time 10+ Year Member



This would be Yahoo's "poison pill" IMO.
3:42 pm on Apr 10, 2008 (gmt 0)

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What, if any, is a positive benefit Yahoo would get from such an arrangement (aside from the poison pill aspect)? If I were a Yahoo shareholder I would be livid at this prospect. AOL was a huge mistake for TW... so naturally Yahoo seems to think this is a good idea because...
11:00 pm on Apr 10, 2008 (gmt 0)

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Maybe Yahoo could buy in ISP expertise from Yahoo Japan (a separate company, but I believe Yahoo USA retails a relatively significant stake)... In Japan, Yahoo is one of the largest ISPs with over five million broadband customers and they've made a roaring success from that part of the business. They could go after the AOL userbase to try and transition a percentage of them to high-speed access.

[edited by: Edwin at 11:01 pm (utc) on April 10, 2008]

11:27 pm on Apr 10, 2008 (gmt 0)

WebmasterWorld Senior Member marcia is a WebmasterWorld Top Contributor of All Time 10+ Year Member



They could go after the AOL userbase to try and transition a percentage of them to high-speed access.

Which here in the US, could be AT&T/Yahoo DSL, which is cheap and 99.9% flawless.
2:26 am on Apr 11, 2008 (gmt 0)

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I'll second what Marcia said. Whatever happens with this whole Yahoo mess...and it is a mess...I've no cause to complain about Yahoo/ATT DSL I get here in Nevada. Flawless, fast and no complaints whatsoever.

It make me think, though...how successful would Yahoo actually be in getting AOL users to use Yahoo? Just because Yahoo works with ATT in broadband where I live, doesn't mean I use Yahoo anymore than I did before. My home page is still MyWay and I still use Google for searches and Gmail for online mail. Unless Yahoo "gets a cut" of my DSL subscription price, they aren't making a dime off of me. This is one reason why it would be risky to buy AOL "in the hopes" of getting more people to use Yahoo. When Yahoo was the only real game in town years and years ago, such a strategy might have made sense. But today, it really doesn't...many if not most of those AOL users know by now that there is a whole big Internet beyond the walls of Yahoo.