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Archive for December 16th, 2005

Google to buy stake in AOL?

Posted by hs on December 16, 2005

Coming as it does shortly after Steve Case made the case for splitting Time Warner (AOL – A Time-less Saga?), BBC is carrying a news item on purported sale of 5% stake in AOL to Google at approximately $1 billion.

This is especially valuable for Google since its the current search provider for AOL.com, and gets 2-4% of its annual net revenues. Google might also be interested in leveraging AIM (AOL Instant Messenger). AOL is valuable also because its one of the few independent big portals left. Google can’t afford to lose it to MSN or Yahoo (which already have their own portals – MSN.com and Yahoo.com).

On the flip side, Google might have already recouped some of the deal cost as reflected in the share price jump (7% to $435.20).

However, Carl Icahn doesn’t seem to be pleased:

It is my belief that, if the proper partner were allowed to have control of AOL, shareholder value would be much more greatly enhanced than through a half-hearted joint venture that might only serve the purpose of entrenching management.

Keywords: AOL, Google, Stake, 5%, Share price, Carl Icahn, AOL.com, MSN, Yahoo, Search engine, Portal, Steve Case, BBC, Sale

Posted in Economics, Internet, Tech/Biz | 1 Comment »