Yahoo ‘Re-Bewkes’ Microsoft
The idea: Yahoo would take AOL off Time Warner's hands -- a move that would reportedly save the companies $1 billion a year in operating expenses -- and in return offer Time Warner a minority stake in a bigger, better Yahoo.
Microsoft is eyeing Yahoo as essential to building an Internet advertising business powerful enough to thwart Google (Nasdaq: GOOG)’s global dominance. Alas, Yahoo continues to pooh-pooh Microsoft's original $44.6 billion hostile bid.
For its part, Time Warner also has grand Internet advertising ambitions. Time Warner CEO Jeff Bewkes has helped reorient the company's AOL division from Internet access to applications and advertising. Indeed, over the past year, Time Warner has spent $900 million assembling an interactive advertising operation now called "Platform A." (Apparently, "OL" was the troublesome part of the AOL business, LOL.)
Today, Platform A is the Advertising.com side of AOL, including the recent acquisitions of Buy.at, Quigo, Tacoda, Third Screen Media, AdTech AG, and Lightningcast. When you add up the pieces, it's the largest Internet advertising network with growing contextual and behavioral targeting, plus mobile and online video capabilities.
Meshing Platform A with Yahoo would create a formidable force, one with potential reach into the cable industry too. Comcast Corp. (Nasdaq: CMCSA, CMCSK) now uses Yahoo as its advertising and video partner for both its Comcast.net and Fancast Web portals. (See The MSFT-YHOO Cable Connection.)
On the flip side, some argue a Yahoo-Microsoft merger could give the telcos a helping hand. (See Yahoo, Microsoft Merger Could Aid Telcos.)
The combination remains likely, as a Yahoo-AOL alternative is likely to make Microsoft even more hostile, and acquisitive.
Steve Balmer is itching to yell, "Yahoo!" after sealing the deal.
— Michael Harris, Chief Analyst, Cable Digital News