updated 11:55 pm EDT, Mon September 29, 2008
MS wants Yahoo and AOL
Despite meeting steadfast resistance from Yahoo executives, Microsoft is reportedly examining another purchase attempt should Yahoo acquire AOL, according to Macworld. The news comes as analysts estimate Yahoo's stock could drop from $19 to $14, should information regarding Google's advertising department getting cold feet about their ad deal prove true. Google is concerned about anti-trust allegations, considering Google and Yahoo's combined dominance of the online advertising market.
The main reason for the potential drop in stock price is due to investor irritability. Many investors feel that Yahoo's business strategies are insubstantial, failing to direct the company in a successful direction. This, in turn, would inspire Yahoo to more closely examine mergers out of desperation.
Yahoo has already furthered talks with Time Warner over the purchase of AOL, especially since investor Carl Icahn joined Yahoo's board, urging the company to formulate a deal with another company.
The combination of Microsoft, AOL, and Yahoo would net Microsoft 25 percent of the online advertising market, versus Google's 65 percent. It would not be without its potential problems, however, since Microsoft's dominance in display advertising could land it in a similar circumstance to the current Yahoo and Google situation.