AOL, Google, and News Corp. Take an Interest in Yahoo!

By April 11, 2008
Keywords : Smart city, advertising

Yahoo may form an advertising pact with Google and combine Internet operations with AOL; meanwhile Microsoft strengthens its bid to acquire Yahoo with the aid of News Corp.   Yahoo, Inc. and Time Warner are approaching a deal to f

old AOL (minus its dial-up Internet access business) into Yahoo and form a combined company. The AOL-Yahoo merger would value AOL at $10 billion and involve AOL investing cash into Yahoo’s repurchase of shares at a price above Microsoft’s offer reported The New York Times.   The Microsoft Corp., on the other hand, revealed talks to unite with Rupert Murdoch’s News Corp. in its offer for the Web giant. As of Thursday, April 10, no agreement had been reached; however, talks appear to be serious as News Corp. considers adding some cash to the deal. A deal of this magnitude would, in effect, unite three of the largest Web properties: News Corp.’s Myspace, Microsoft’s MSN and Yahoo. Furthermore, the partnership would create an all-in-one site for online advertisers, unite the largest social networking sites, as well as combine online news and e-mail.   Also in the mix, Yahoo announced on Wednesday, April 9, an experiment to outsource its search ad sales to Google. The trial partnership is part of Yahoo’s planned three-way alliance to combine Yahoo with Time Warner Inc's AOL and hopefully fend off absorption by Microsoft.   With the announcement, Yahoo shares rose nearly 3 percent on Thursday to close at $28.59, while Microsoft rose 0.8 percent to $29.11.   Microsoft’s current offer values Yahoo at $29.33 per share, which the Web company turned down as too low.  Until Wednesday, Yahoo appeared to be without a choice other than Microsoft, which has threatened to lower its bid if not accepted within three weeks.   Many analysts and investors expect Microsoft will ultimately win its bid for Yahoo. However, Yahoo’s efforts aren’t completely without merit since Yahoo may now be able to negotiate a higher asking price from Microsoft.   By Kathleen Clark   FEEDBACK For comments on this article, email us at

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