According to a report tonight in the Wall Street Journal, Yahoo and AOL are closing in on a deal to combine their Internet operations, a move that could thwart Microsoft Corp.’s effort to acquire Yahoo.
The possible Yahoo-AOL partnership, is according to the Journal, part of a plan by Yahoo to present shareholders with alternatives to accepting Microsoft’s unsolicited offer.
According to the report Time Warner would fold its AOL unit into Yahoo and make a cash investment in return for about 20% of the combined entity.
The deal, which wouldn’t include AOL’s dial-up access business, would value AOL at about $10 billion.
As part of the deal, Yahoo would use the Time Warner cash and additional funds to buy back several billion dollars worth of its own stock at a price somewhere in the middle of the range between $30 and $40 a share.
Any deal would have to be approved by Yahoo’s shareholders.
Microsoft has offered Yahoo shareholders a combination of cash and Microsoft shares which at the time made the offer $31 a share but at today’s close would value the offer at $29.24 a share.
Yahoo annouced ealier today that it was entering a 2 week test with Google to have adsence ads appear on 3% of Yahoo traffic.
Google handles search advertising sales for AOL and owns a 5% AOL stake.
Yahoo’s sites had the most U.S. visitors in February, with 137 million, while AOL’s 109 million visitors put it fourth behind Google and Microsoft, according to research firm comScore Inc.
An AOL-Yahoo partnership would be much better for domainers than a Google-Yahoo partnership which would leave all domainers with only on PPC Provider. That is of course assuming that AOL would use Yahoo for it’s traffic rather than Google.
Nice writing style. I will come back to read more posts from you.
Susan Kishner
This would be a wonderful combination indeed . . . for us domainers, advertisers, searchers, 1000’s of Yahoo employees, Time Warner, AOL . . . shoot . . . for most everyone (well; except maybe MS and their stock holders) . . .
. . . though; if it happens; Yahoo ought to hold off on buying back its own stock until MS goes away . . . and the stock drops (temporarily) back below $25-30/share.
Steve
Agreed
the more I think about this the more I like it…maybe yahoo finally has woke up…but it took msft to get them to do it 🙂
I like Yahoo- AOL the best of the possible combo’s.
But now news corp is back in again after serveral times saying they had no interest, backing MSFT bid