Yahoo taking on Google, Microsoft for AOL?

Portal powerhouse reportedly leaves sidelines and enters struggle with Google and Microsoft for a piece of America Online.

Yahoo reportedly has left the sidelines and entered the struggle with rivals Google and Microsoft for a piece of America Online.

Yahoo is in talks with AOL, according to an article on TheStreet.com, which cited unidentified sources. The prize: AOL's millions of search and portal users and the related $380 million in ad revenue that now goes Google's way.

Representatives of Yahoo and of AOL, a unit of Time Warner, declined to comment on the report. The word comes on the heels of rumors that first Microsoft, then a Google-Comcast partnership, were in discussions with AOL.

If Yahoo is in the running, the stakes could get high.

"When you've got multiple players going after a property, like anything, you get increased competition and people tend to bid higher," said Rob Enderle, principal analyst at the Enderle Group.

Gary Stein, an analyst at JupiterResearch, agreed.

"It does certainly seem like everyone is interested in AOL these days, particularly because of its (large volume of) traffic," said Stein. "There is no clear indication that AOL is even looking to sell, but now, all of a sudden, they are the most popular girl at the dance."

As far as Yahoo joining in, Stein speculated that "there is no clear reason for it, other than maybe the fact that after a couple of people become interested in this property, others look at it and say, 'I certainly don't want to see it go to a competitor.'"

AOL recently had a makeover and a huge shift in its business model when it opened up its formerly walled-off content to the Internet at large and launched a new AOL.com portal. The move was designed to help grab some of the free-flowing online ad dollars going toward Google and other search rivals.

"Part of the reason they relaunched was to create value around the property," Enderle said. "It's been no secret that Time Warner has wanted to dump this thing since they took control over" it.

In a shocking move that illustrated the exuberance of the era, AOL merged with Time Warner in a staggering stock transaction worth about $160 billion.

For Yahoo, Google and Microsoft, a bid for AOL is a defensive move against the others, Enderle said.

"Microsoft probably has the strongest synergy with AOL, because MSN was designed (based) on the AOL model," he said. "Of the three, Yahoo needs (AOL) the least."

Featured Video
6
This content is rated TV-MA, and is for viewers 18 years or older. Are you of age?
Sorry, you are not old enough to view this content.

The problem with hoarding photos on your phone

Do you have hundreds (or thousands) of photos on your phone? This one's for you.

by Sharon Profis