Filed under: Deals

There is a report out of the Wall Street Journal that Yahoo! Inc. (NASDAQ: YHOO) and Time Warner Inc. (NYSE: TWX) may be close to inking a deal that would potentially combine Internet operations of the web giants. Obviously, this would be directed right at thwarting the current attempts by Microsoft (NASDAQ: MSFT) to acquire Yahoo!.

According to the WSJ, Time Warner would make a large cash investment into Yahoo! and then Yahoo! would repurchase “billions of dollars” worth of its own shares in the mid-$30’s. While this is an attempt from Jerry Yang to fetch a higher valuation, there is no guarantee that any such valuation would net a higher return for shareholders. There were headlines earlier today tying Yahoo! into running some “test search-ads” via Google (NASDAQ: GOOG). Google still owns 5% of AOL as well.

We have considered all the possibilities in a similar situation, and what the ramifications for other Internet and media players out there. For starters, we’d even call it a rumor, and we’d even note the possibility that this could be a “test announcement” from the companies to see what the reaction would be if such a deal was formally struck (that wouldn’t be the first time any company has done that). This entire situation should still all be considered hearsay at this point as there have been no press releases issued by any of the companies on any such merger terms, investment terms, and ad terms. If it is real, then we’d be expecting a press release from one of the companies at some point by Thursday or Friday, if not sooner.

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This entry was posted on Saturday, April 12th, 2008 at 12:07 am and is filed under Engagements and Deals News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.