AOL, Yahoo Mulling Merger 136
Mike Zahalan writes with an update to last month's news that AOL and various private equity firms were exploring the possiblity of buying Yahoo. While talks between the companies have not officially gone much deeper, AOL has now hired financial advisers to analyze their options. Still, Kara Swisher writes at All Things Digital that the complexity of a deal between the two companies will be the biggest obstacle they have to overcome.
"Among the issues being grappled with: Onerous tax implications around a variety of deals; a need for complete cooperation from too many players; and the realization that a hookup of AOL and Yahoo might cause more problems than it solves. 'It looks great conceptually and everyone gets all hot and bothered,' said one prominent investor who did his own strategizing about Yahoo and AOL. 'But when you actually do the numbers, you hit a pretty big wall of impossible.'"
Death throes (Score:1, Interesting)
I remember when Yahoo! and AOL were the most important companies in their field.
AOL was so big that they bought media giant Time Warner.
Yahoo! was so big they were the homepage of over 90% of the internet-savvy population.
The internet changed AOL so much that it became unrecognizable as that company that used to clog mailboxes with 3.5" floppies and CDs with their software. Google surpassed Yahoo!'s hierarchical solution with its ranking-based solution.
Now both companies are in their final years, looking for a way to survive into the next decade. But realistically, without an actual software infrastructure that can be deployed across various device domains, the companies have no compelling story to sell customers.
They will continue to see their users migrate to Google and Apple. The best they can truly hope for is to become yet another app on Android and iOS (YAAOAAI!). They will never again be the gate keepers they once were.
Re:Wait... (Score:4, Interesting)
My old room mates parents still pay aol 10 dollars a month. The kicker is they have Time Warner broadband that they pay 50 a month for. Trying to explain this to them results in the deer in a headlight syndrome.
They are also trying to repair their Pentium 2 computer, instead of taking the two year old Core2Duo that my old room mate tried to give them.
Another garbage truck collision? (Score:4, Interesting)
I recall an IT industry commentator comparing on the hp-Compaq merger as two garbage trucks colliding. I thought that was a reasonably accurate analogy.
But these two companies are kind of...worse. Maybe two honeywagons colliding? It'll take a while to get all that stink mopped-up!