Stephen Withers
Friday, 11 April 2008 03:31
IT Industry -
Strategy
Page 1 of 2
The Yahoo! takeover story has shifted up a gear with reports that the company is trying to negotiate a tie-up with AOL, while Microsoft may bring News Corp in on its increasingly hostile bid for Yahoo!.
According to various reports, The Yahoo!-AOL proposal involves Time Warner merging AOL with Yahoo! and injecting a substantial amount of cash in return for a 20 percent share in the enlarged Yahoo!.
The merger would be followed by the purchase of billions of dollars of the company's own shares in an attempt to drive the price above that originally offered by Microsoft.
The merger of AOL and Time Warner was one of the biggest deals during the dot-com boom, but very little of the perceived value remains. Suggestions that Time Warner wants to offload the AOL operation have been circulating for several years. At one stage, Microsoft was tipped as a possible buyer.
Details of the rumoured Microsoft-News Corp alliance are sparse, almost to the point of non-existence. Presumably a joint bid by the potential partners would be at a sufficiently high price to attract existing Yahoo! shareholders (even if it wasn't high enough to gain board support), with News Corp able to extract some value from the deal in ways that Microsoft can't.
Previous reports had Yahoo! investigating a merger with News Corp's Myspace as an alternative to Microsoft's bid.
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