Yahoo picks AOL over Microsoft

Written on April 11, 2008 – 10:24 pm
Boris Veldhuijzen van Zanten, Serial Internet Entrepreneur

Yahoo News is reporting that Yahoo & Time Warner are getting close to doing a deal leaving Microsoft behind. This is far from confirmed but an interesting development in this ongoing story. From the Yahoo! News article:

“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.”

Many readers will prefer anything above Microsoft when it comes to Yahoo and an acquisition but I’m not sure I actually like the prospect of an AOL/Yahoo merger. Once a market leader, AOL is now known more for its lack of innovation and strategic mistakes when it comes to predicting the future of the web.

AOL has the appearance of a sleeping giant.
At least Microsoft is aggressive…

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aol, merger, yahoo

About the author: Serial entrepreneur and founder of several companies. Current activities include TwitterCounter.com and The Next Web Conference & Blog.

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5 comments/trackbacks to “Yahoo picks AOL over Microsoft”

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By Scott Rafer on Apr 11, 2008

I completely disagree. Y!OL has at least some chance of improving together and competing. MS would not gain any of the synergies. They are too aggressive and could not move at all in Y!’s cultural direction. They’d kill it and not retain any value at all.

[Reply]
By Robert-Reinder Nederhoed on Apr 11, 2008

With only my underbelly as an argument: anything but MS.

I like Yahoo. I do not know AOL well. MS’ time has come to shrink. In my opinion. As long as they’re getting fines from the EU, I will not trust that company.
Big changes have to happen for that sentiment to disappear. Their engagement in dataportability is a start.

Boris, any predictions on the influence of this rumor on stock value?

[Reply]
By Jochem Prins on Apr 12, 2008

At this point I can’t really say if I would prefer a MS/Y! or a AOL/Y! merge. To be honest, I think both options would have a negative impact on Yahoo’s culture.

Actually, what worries me most about this story is:
“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”.

On the short term, Yahoo! will most definitely gain more revenue on their sponsored listings when they outsource to Google. But why not extend their own platform in cooperation with Time Warner? Compete with Google, that’s what I would like to see.

[Reply]
By Robert-Reinder Nederhoed on Apr 12, 2008

Because Google owns 5% of AOL? Don’t they?

[Reply]

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