Yahoo rumored to be in AOL talks

The Wall Street Journal says negotiations are under way on a deal to merge the two companies' Internet operations.

Just when I thought it was safe to head for the bar comes news, courtesy of our colleagues over at the Wall Street Journal, that Yahoo and AOL are working on a deal to combine the two companies' Internet operations.

"The possible Yahoo-AOL tie-up is part of a threefold plan by Yahoo to present shareholders with an alternative to Microsoft's unsolicited offer. Yahoo would also propose repurchasing billions of dollars of its own shares and is negotiating with Google Inc. about an advertising tie-up, people familiar with the matter said."

Say this much for Yahoo CEO Jerry Yang: He's giving it the old college try--anything to make sure he doesn't wind up reporting to Steve Ballmer. Earlier in the day, Yahoo said it was testing the use of Google advertisements on some of its search pages.

The WSJ story correctly raises the possibility that this may all be a negotiating ploy to squeeze a higher price out of Microsoft. If that is the case, Microsoft isn't letting on just yet--at least not publicly.

Reached for comment, a spokesman repeated Microsoft's earlier statement by the company's general counsel, Brad Smith. "Our proposal remains the only alternative put forward that offers Yahoo! shareholders full and fair value for their shares, gives every shareholder a vote on the future of the company, and enhances choice for content creators, advertisers, and consumers."

 

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