Yahoo and AOL planning to strike a deal
2008-04-10 13:27:46 (GMT) (Caymanmama.com - Featured News)AOL and Yahoo are trying to negotiate a deal in order to merge their Internet operations, reported Fortune Magazine.
Initially the news was reported in the Journal of Wall Street which affirmed that Time Warner would merge AOL into Yahoo as well as make a huge investment of capital for a 20% venture of the joint company. Yahoo in return would repurchase its numerous billions of shares in mid $30 range. Time Warner is the parent organization of CNNMoney.com and Fortune.
This means war for Microsoft. The New York Times and Journal have reported that Microsoft is now trying to approach News Corps. in order to bid in a joint venture for Yahoo. Steve Ballmer, CEO Microsoft, on Saturday sent a strongly worded letter to the shareholders of Yahoo that the company must accept the offer within the time limit of three weeks, otherwise face the proxy fight of nominating new board of directors.
Also, Yahoo is looking out for the possible advertising deals with Google. Just before few hours of the news released about the merging of Yahoo and AOL mail services, Internet portal broadcasted that the company would primarily run two-weeks tests in order to run search advertising of Google.
Several industry watchers started to suppose that Yahoo accepting the contract of Microsoft would be the most appropriate solution.
In one note on Wednesday, Ben Schacter, USB analyst wrote “We continue to believe reaching a mutual agreement with Microsoft would be the best way for Yahoo to potentially extract a higher bid. The alternative would be for Yahoo shareholders to tender, although this process would not be as expeditious as if the two sides were to come to terms, and could involve a lower offer price, making the battle potentially even more protracted.”
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