Report: Microsoft Meeting with Time Warner Regarding AOL
Just two days after
from its $49.6 billion bid for Yahoo, the Times Online
. is reporting that Microsoft is meeting with Time Warner executives
regarding a possible bid for America Online -- the very company Yahoo
in a possible attempt to stave off the takeover bid from Redmond.
According to the
article published Monday, the talks started before the Yahoo-Microsoft negotiations
fell apart -- possibly initiated back when "Microsoft was seeking to stymie
discussions between Time Warner and Yahoo," as Times reporter Suzy
Jagger wrote -- but, according to unnamed, sources have continued.
deal with Time Warner values AOL at approximately $10 billion. But Time
Warner may think Redmond can offer something sweeter: It was also reported this
weekend that AOL approached Microsoft regarding acquiring the company.
Many analysts are speculating that another high-traffic Internet site like
AOL, MySpace or Facebook will be the next target for Microsoft Chief Executive
Officer Steve Ballmer. In fact, in his Saturday letter
to Yahoo CEO Jerry Yang explaining why he walked away from the deal, Ballmer
wrote, "We will move forward and will continue to innovate and grow our
business at Microsoft with the talented team we have in place and potentially
through strategic transactions with other business partners."
are encouraging Microsoft to pursue AOL, the aging Internet provider may
not stand up as a Yahoo replacement; the company's ad revenue dropped
23 percent in the last year with flat ad sales, despite its Web traffic
15 percent. According to comScore, an Internet traffic tracking site, in
March AOL ranked fourth in overall U.S. traffic with 111 million users monthly,
compared to first-ranked Yahoo with 139 million.
Another possible barrier to any Microsoft-AOL deal is that Google
owns a 5 percent stake in AOL. Yahoo's recent
advertising deal with Google was one of the main factors Ballmer cited in
his letter for walking away from Yahoo, writing in part that Yahoo's "apparent
plan to pursue such an arrangement in the event of a proxy contest or exchange
offer leads me to the firm decision not to pursue such a path."
Microsoft and Time Warner did not respond to the Times report.
Becky Nagel is the director of online media for 1105's Enterprise Computing Group and executive editor for several of its sites, including Redmondmag.com and ADTmag.com. Contact her via e-mail or follow her on twitter at @beckynagel.