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YHOO-AOL? You’re Kidding Me?
By Mark Evans | February 11, 2008
Update: Yahoo has turned down the offer because it “is not in the best interests of Yahoo! and our stockholders”. Now, this is getting interesting!
In an attempt to avoid the clutches of the hordes from Redmond, Yahoo is apparently looking to get into merger talks with AOL, the one-time king of the Internet.
According to the Times of London, Yahoo and its investment bankers are exploring several options, including deals with Google and Disney. Yahoo’s with AOL in the past apparently fell apart because both sides couldn’t agree on price.
The initial impression is that Yahoo is trying to pull off some kind of scorched earth strategy. Even if doing something with AOL makes little strategic sense, Yahoo believes it’s a better move than letting Microsoft get hold of Yahoo. Or you could call it the cut-off-your-nose-to-spite-your-face strategy.
If Yahoo wanted to make a bold strategic move, buying AOL ain’t it. And as TechCrunch points out trying to get into bed with AOL is far from a “fierce” tactic to keep Microsoft at bay. Henry Blodget suggests Yahoo is just using AOL to squeeze more money from Microsoft, which is actually a smart negotiating tactic.
After having more than week to pick apart the hostile bid, you have to wonder what Yahoo is thinking. Is being acquired for a hefty premium by Microsoft that terrible a fate? Is staying independent better if it means handing off the search business to Google? Why AOL? Why now given AOL’s going nowhere fast?
When it comes to Yahoo, we’re talking about a business that has struggled for the past few years trying to find some strategic mojo. Getting Jerry Yang to become CEO smacked of desperation - much like Yahoo’s exploration of doing something with anyone other than Microsoft.
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