AOL, Yahoo, Microsoft talks heat up

July 16, 2008

bewkes4.jpgTime Warner’s talks with Yahoo and separately with Microsoft have taken on renewed urgency as a pivotal Yahoo annual shareholders meeting approaches, a source tells us.

But are the discussions earnest or is AOL being used as a pawn in an increasingly ugly battle that will ultimately lead to a linkup of Microsoft and Yahoo? It’s hard to tell at this point as a steady stream news, punctuated by public accusations of “misleading” statements come from Microsoft, Yahoo and billionaire investor Carl Icahn, make handicapping the outcome difficult.

Icahn, who holds a 5 percent stake in Yahoo, has waged a proxy battle to remove Yahoo’s board and has aligned himself with Microsoft to seal a deal.

Some on Wall Street, including Bernstein Research’s Jeff Lindsay have sung the praises of AOL’s stock and cash deal for Yahoo, which in April was believed to be worth as much as $37.01 per share. But when asked, most industry and financial analysts hold firm a belief that Yahoo is still Microsoft’s to lose.

Ignoring signals that there will be no deals with AOL before Yahoo’s Aug. 1 shareholders meeting, Time Warner appears intent on pressing its case with the potential suitors perhaps eyeing an opportunity — especially after this past weekend’s fallout between Microsoft/Carl Icahn and Yahoo.

Keep an eye on:

  • Rival New York Newspapers the Daily News and New York Post are considering some type of collaboration, in an effort to cut millions in annual costs. (New York Times)
  • Paramount Pictures abandoned efforts to secure about $400 million in film financing through Deutsche Bank. (Reuters)
  • Every song from Metallica’s upcoming album “Death Magnetic” will be available for gamers to download and play on “Guitar Hero III” and its sequel “Guitar Hero World Tour” on its release day. (Billboard)
  • Wall Street Journal to raise price to $2. (Reuters)

(Photo: Reuters)


We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see

Microsoft owns 90% of the entire worlds’ software.

I think that is quite enough for any single business.

We need no more Microsoft monopolizing of the computer industry.

Microsoft employs appx 30,000 people. Yet, not ONE of them is bright enough to outsmart teen-aged boys hacking into the worlds’ computers and spreading virus and madness and mayhem.

I wouldn’t doubt that some of the “Anti-Spy ware” and “Anti-virus” companies are subsidiaries of Microsoft.


Msoft owns enough, already!

Posted by ga ra | Report as abusive

Icahn is on the wrong side of this.
While in the short-term, Microsoft buying Yahoo! is a good move for stockholders… in the long-term they will all be let down and screwed.

Posted by Rich | Report as abusive

Not to show your ignorance, but Microsoft employees over 80,000 people. Second, Microsoft operates in many businesses and is only dominant in only two, with Google and Apple nipping away at those. In search, Google has this same dominance, with a combined Microsoft and Yahoo still only achieving less than 25% of the online advertising market. I’m not sure why you would want to create another monopoly, in this case Google, versus letting all the aforementioned companies compete in each others markets, which as we know is best for consumers.

Posted by Russ | Report as abusive

“Microsoft employs appx 30,000 people. Yet, not ONE of them is bright enough to outsmart teen-aged boys hacking into the worlds’ computers and spreading virus and madness and mayhem.”

You underestimate the complexities involved. Windows, as any modern OS, is extremely complex piece of software. It is impossible to design it bug / vulnerability free.

The problem with Windows is the following:
1. They try to appeal to everyone from the home user to the business user, to the computer programmer to the embedded system, MS tries to scale essentially the same piece of software.

2. MS tries to support everything. Windows supports all kinds of exotic hardware, drivers all kinds of junk.

3. MS tries to dumb Windows down. Lately, they’ve been following the philosophy that the computer needs to be able to do anything and everything right out of the box – no configuration required, so that regular joe, can just plug in his wireless card and have wireless access for example.

The result of these 3 is that Windows is slow, unsecured and bloated. They drop support for older drivers in Vista and now everyone is complaining that their hardware does not work … They tried to give security more prominent place in Vista and now everyone is complaining that they are annoyed with Vista’s popups that they do not understand.

Maybe MS was right trying to dumb down everything. Maybe they should come up with computer with only 3 buttons, red for internet, green for email and yellow for chat…

Posted by vince | Report as abusive

O.K. … so it is even worse than I thought! I didn’t ‘Google’ to check my facts. Are the 30,000 employees in the U.S.– with the remainder overseas earning less wages than is necessary for a decent standard of living for their area?

These huge American Corporations … don’t want to pay Americans ~ “American wages” … Yet, they charge Americans ~ “American prices” for their product! Something is amiss there.

They prefer to say that “guest workers” are willing to do jobs that “Americans won’t do.”

There are no jobs that Americans won’t do.

There ARE, however, jobs that American employers refuse to pay FELLOW Americans a living wage to perform!!

So, instead of importing slaves – as in the days of old (’cause it is now illegal), they “outsource” the work to impoverished people overseas, or encourage the inflow of *guest workers* into the country (technically, *illegal aliens* … but … stated in a more clear lingo, *volunteer slaves*) by hiring them.

Microsoft’s 80,000 employees should be more than capable to spar with one another on the anti-spy/virus front … and yet they don’t! WHY?

They must LIKE the vulnerability in the software … I, actually, think it’s built in …

And now they want in on the search engine market … I say NO!

Posted by ga ra | Report as abusive

[…] até porque a microsoft não tem tido a competência necessária pra tratar a compra de yahoo, segundo o le monde. o jornal francês diz que redmond deveria estudar e se inspirar em carlos brito e na compra da bud pela inbev, que foi um resultado de paciência e coerência, tudo o que faltou ao sucessor de bill gates na atabalhoada operação msft+yhoo [até agora]. especula-se que, alguma hora, os lados vão voltar a conversar e talvez se acertem. […]

Posted by dia a dia, bit a bit… por Silvio Meira » microsoft cresceu [mais de] um yahoo no ano | Report as abusive