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AOL Merger, the Solution to Yahoo!'s Problem?

Talks reportedly restarted

By Vlad Constandes, SEO News Editor

11th of February 2008, 11:56 GMT

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Yahoo! turned down Microsoft and is heading to a world of pain, should their shares value start dropping again. The past week, the Sunnyvale-based company and the team of advisers from Goldman Sachs and Lehman Brothers, that it hired for consultancy, have been trying hard to find an alternative that would set the ship's sails in the wind's direction once again.

One option that they have considered is that of a merger

with Time Warner's AOL. As with Microsoft, this is the second time Yahoo! is thinking about it and attempting it, the only difference from the prior situation is that the knife has reached Jerry Yang's company's bone this time. It's a make-or-break moment, the first real one in its history.

What broke the talks down in the past was the difference in price between what AOL asked and what Yahoo! was willing to offer, but with the sense of impending doom, should it follow any of its other two options (Google and Microsoft), I'm thinking that shouldn't be a problem any more.

All fine and dandy, Times Warner has been trying to get AOL to work effectively at its set parameters, but without any real success, leading to last week's separation of the subscription business and the advertising platform that AOL has come to be. Needless to say, this would be A move, but not THE move that would work wonders for Yahoo!. The motives have been repeated over and over again, but I'll run them by you again: the merger would not plug any of Yahoo!'s holes, as AOL has very little to offer in search marketing platform or algorithmic search technology, both of them provided by Google. Not to mention that it would mean adding only 5 percent to the search share, too little, too late, if you ask me.

The AOL Yahoo! deal would have been great, if the circumstances had been different. It would have been a good expansion move when the ship sailed clearer waters, but during the storm Yang is trying to steer his crew right now, it would be like adding a couple of life boats instead of throwing anchor.

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yahoo news | aol | yahoo | merger | microsoft

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