Microsoft Hunts Yahoo – Is AOL Next?
So the blogosphere is agog with today’s big news that Microsoft has made a $44.6 billion bid to acquire Yahoo. I won’t pile on when so many others that have much more knowledge than I are busily chiming in. I will just say that I think this is just the first of many mergers and acquisitions we will see in 2008. There are too many duplicitous players out there and as the economy tightens, the strong will swallow the weak. Also, people are getting tired of having so many sites to keep track of (c’mon OpenID) that they will welcome a merger of some of their favorite social sites (can you say “MyFaceLinked”? – quick – go reserve the domain).
It did get me thinking about my old company AOL, however. Could they be on the radar for Microsoft to gobble up as well? Others have posited that Google might want to snap up AOL to strengthen their advertising sales force. That is certainly a possibility as well. But since I am way overdue to deliver some 2008 predictions, here is what I think will take place:
- AOL is three different companies in one: the dial up subscription service, the Web services (publishing, media, IM, e-mail, MapQuest, TMZ.com, etc.), and the “Platform A” advertising business (anchored in Advertising.com).
- Time Warner will not give up on Platform A. It recognizes the value of the online advertising business. It may decide to merge the “publishing” parts of the Web services with its Time Inc. publishing division. But the dial up business and the “services” part of Web services? I think they would be happy to find a buyer.
- So, they sell the dial-up for scrap; merge their hot Web properties (MapQuest, TMZ.com, etc.) into a newly fortified Time publishing division; hold onto Platform A; and offer everything else (AOL portal, e-mail accounts, AIM, ICQ, etc.) to the highest bidder.
- Who would want it? Microsoft? Google? Hard to say. But Google does have an inside advantage: they already own 5% 0f AOL. They purchased that for just over $1 billion in 2005.
- When does all this happen? In July 2006 – because that is when Google can exercise an IPO on the 5% it owns.
So, that is my shot in the dark. I will repost in August to see how accurate I was. ;o)
Let me know what you think…