July 21, 2008
[Posted by Shar VanBoskirk]
Word is that TimeWarner is in talks with both Yahoo! and Microsoft about potentially selling AOL to one of the two. To be honest, I don’t think an acquisition of AOL gives either MS or Yahoo! the presence that a MS/Yahoo! marriage would build against Google.
To weigh in on impact to the market if it did happen:
The greatest values of AOL today are its portal audience (still loyal, and not as geriatric as you might think), and its mapquest and instant messenger applications (also with loyal users that not necessarily AOL portal users). With this in mind, I think the most synergistic fit for AOL would be a purchase by Microsoft. Because AOL’s greatest assets, are MSN’s greatest challenges today. Frankly, AOL doesn’t have an exceptional online advertising platform, it has no search engine or search business to speak of, and its ad networks are healthy, but would be equally valuable to either Yahoo or MSN.
If I were MS, I would buy AOL, use it to supplement my existing capabilities and I would leave Yahoo alone.
If I were Yahoo, I would have accepted the MS offer in May J. But at this point, I think they should spend any R&D dollars on integrating their existing businesses (search, display, social media, consumer communities, user generated content) instead of acquiring other businesses which will just give them more of what they already have.