Reports surfaced of Google and Comcast looking to buy a minority share in AOL. Both companies have been in negotiations separately, but it was reported today they are making a joint effort to get a small chunk of the company.
Reuters broke the story earlier on Wednesday afternoon, listing a “source familiar with the matter.” Apparently, the two companies are talking about a joint investment in AOL.
The tech world is ablaze over speculation surrounding these portal companies’ actions. The New York Post broke the story some weeks ago that Microsoft was in discussions with Time Warner over a 50% stake in the online entity. The Microsoft talks have been on-again/off-again during that period although they are on now. The story also said ongoing discussions were happening with Google and Yahoo as well as Microsoft at that time.
Time Warner said at the time of the article, Microsoft was their choice of companies but there were flaws including Microsoft’s 50% ownership of MSNBC, a direct competitor of Time Warner’s CNN. The Google/Comcast could present problems too though as Comcast is a direct competitor with Time Warner’s cable entity.
All this is made even more interesting by the fact that corporate raider Carl Icahn sent a rather contentious letter yesterday to Time Warner’s board of directors calling the purchase of AOL a “disaster” and a “cardinal sin.” Icahn and his allies are looking to put pressure on the board both to make changes and get some seat on the board because Time Warner’s stock has been stagnant for years now. They claim the merger with AOL was a big reason. It’s unclear whether this will force Time Warner to act a bit more quickly than they might have. In any case, whoever wins AOL will get a severely needed leg up in both search and portal activities.
It looks more and more like AOL will be carved up in some manner. Whether it will be a Time Warner/Google/Comcast deal or with Microsoft or something else entirely is unknown. But it is becoming clearer that Time Warner is getting desperate to do something constructive with AOL, particular since the company has been hemorrhaging subscribers for years now and the ad revenues aren’t there yet.
John Stith is a staff writer for Murdok covering technology and business.
