The business news wonks have been buzzing for a couple of months about a Microsoft bid to take over Yahoo, the high-visibility internet entertainment, advertising, and search company with flagging ad revenues.
A funny thing happened in the corporate takeover market when Microsoft kicked off the deal with a bid of $31 per share, a figure that Yahoo chief Jerry Yang didn’t think was strong enough. That brought a lot of new and old players back onto the playing field. Yahoo even reached out to Google, the high-profile, resilient, and highly adaptive internet superstar.
Enter then Time-Warner AOL as a potential partner with Yahoo in thwarting the Microsoft bid. You have to be amused by CNBC’s laconic Joe Kernan who sarcastically mused on Morning Squawk that AOL, which is also not doing well, would drag Yahoo down even further. For that, Kernan got a kick in both legs by nearby colleagues Becky Quick and Carlos Quintanillo. Quick backtrack, but you’ve got to appreciate the guy’s candor and wit.
In this latest development, Time-Warner would combine its AOL segment into Yahoo and put up some cash in return for about twenty percent of the combined company. AOL’s dial-up business would not be a part of the deal.
Microsoft needs to be part of the internet business or runs the risk of becoming irrelevant. Bill Gates is not about to let that happen. He’s reached out to Murdoch’s News Corp, which had also been angling for the internet business. Events are moving so swiftly in the media and internet world that it makes your head spin. Murdoch’s News Corp recently acquired the excellent Wall Street Journal, setting up Fox Business Channel at almost the same time, and now needs a piece of the internet, too.
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