Filed under: Deals, Internet, Microsoft (MSFT), Yahoo! (YHOO), Time Warner (TWX)
Microsoft (NASDAQ: MSFT) may be much superior off by not overpaying for Yahoo! (NASDAQ: YHOO). To pay almost $45 billion for a company that’s really struggling seems extreme — especially since I think Time Warner (NYSE: TWX) will spin out AOL in a few months. Microsoft could purchase AOL much, much cheaper than Yahoo.
AOL brings to the table both traffic and many properties, including BloggingStocks! The problem is that revenue is declining and so are very special visitors, down from 110 million average very special visitors in the fourth quarter, to 109 million in Q1.
I think that with Microsoft’s focused management, it could achieve the same turnaround at AOL that it is expecting achieving with Yahoo, only it wouldn’t have to spend $45 billion.
Some analysts have said that AOL is a consolation prize for the loser in the Yahoo! battle. I think Yahoo! is the booby prize and AOL might just be the better deal.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer’s fund has no position in any stock mentioned, as of 5/1/08
Entries (RSS)