AOL, Yahoo, Microsoft talks heat up

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.

Valley of the moguls

Swan smallerThey call it the Duck Pond, but it’s actually teaming with (vicious) swans. It’s considered a big media and tech powwow, but a broad swath of global corporate titans of finance and politics round out the guest list.

It’s the 26th annual Allen & Co Sun Valley conference, where high-wattage huddles transpiring on the tranquil resort grounds among stunningly rich business people swathed in questionable leisure wear could end up in big deals months from now. The legend springs from the track record: AOL and Time Warner, Walt Disney and CapCities/ABC, Google and YouTube are all said to have gotten started here.

In between knitting (!), yoga, white-water rafting and golfing, and bridge (!) games execs like Google’s trio Eric Schmidt, Larry Page and Sergey Brin mix it up Disney’s Bob Iger, Time Warner’s Jeff Bewkes and News Corp’s Rupert Murdoch.

XM and Sirius: Weren’t they merging or something?

xmsr.jpg Finally, some movement.

It seems that the head of U.S. Federal Communications Commission Kevin Martin will support Sirius Satellite Radio’s proposed purchase of rival XM Satellite Radio.

The Washington Post and others are reporting that Martin decided to support the deal after the companies agreed to concessions intended to prevent the new company from raising prices or stifling competition among radio makers.

A decision has been a long time coming. Seventeen months ago the two companies announced they would merge, bringing entertainers such as Oprah Winfrey and shock jock Howard Stern under the same banner. The Justice Department approved the deal in March, but the companies are still waiting for the FCC.

Take-Two takers?

Take-Two Interactive CEO Ben Feder told us yesterday the company is in formal discussions with a range of parties interested in its “strategic alternatives,” which could involve a sale.

But they didn’t say with whom.

The “Grand Theft Auto” game maker has been fending off the unsolicited advances of Electronic Arts‘ $2 billion offer since March. At the time, Take-Two management deemed the $25.74 per share offer too low, charging EA with low-balling the company ahead of the release of the latest from its hit criminal action franchise. Take-Two traded at $27.52 on Friday morning.

So, who else might be a potential white knight? Time Warner, which has made no secret of its ambitions in the games arena, would be a nice fit, although we’re hearing they’re not in this one. Just this week the company led a $40 million round of financing for online games developer Turbine Entertainment, on the heels of a $30 million investment in April in “Lara Croft” maker SCi Entertainment Group.

A summer romance for GE and Time Warner?


We’re moving into summer now — peak wedding time. Naturally, all sorts of mergers are on the mind.

Take a much-speculated about combination of Time Warner and NBC Universal, a subject that inevitably pops up when anybody talks about potential mergers in the media world. Thanks to Newsweek, it’s once again making the rounds.

Here’s the key takeway from the article:

And so they have begun preliminary efforts to explore a commingling of their entertainment assets-combining GE’s NBC Universal with Time Warner-in hopes of eventually igniting investor enthusiasm and pumping up their stock prices, according to media-industry executives familiar with the developments but not authorized to comment.

Back to basics at Time Warner

time-warner-sign.jpgTime Warner Inc is slimming down, concentrating on the content side of the business (forgive the jargon, it’s just that’s what movies, magazines, TV programming are called these days).

The media giant has just unveiled its much-anticipated plans to spin off Time Warner Cable Inc, resulting in the complete legal and structural separation of the two companies.

Plans call for Time Warner to exchange its 12.4 percent interest in TW NY Cable Holding Inc, a subsidiary of Time Warner Cable, for 80 million newly issued shares of Time Warner Cable’s Class A common stock. Time Warner will pay a one time $10.9 billion dividend.

Is Yahoo’s Yang toast?

steve-case-frowns.jpgLegendary media money manager Gordon Crawford blasted Yahoo Chief Jerry Yang for blowing the Microsoft deal in high profile interviews with the Wall Street Journal and the New York Times.

“I am extremely angry at Jerry Yang and at the so-called independent board,” Crawford told the Times. ”I’m hoping that there is such an outpouring of outrage that the board is embarrassed into revisiting this thing …  but I’m not optimistic about that.”

It may not be wise to aggravate Crawford, portfolio manager for Capital Research Global Investors, a division of Capital Research & Management, which owns 16 percent of Yahoo.

Microsoft and Yahoo: what next?

Yahoo CEO Jerry YangNow that Microsoft has broken off its pursuit of Yahoo, the only thing we know for sure is that those two technology icons will not be merging (right now). Every other possibility and option for the two companies is up in the air. (One thing is for sure, Yahoo’s stock is already down more than 20 percent .)

There are no shortage of opinions:

** Microsoft’s Steve Ballmer is “under the gun” to spend the $46 billion earmarked for Yahoo. (New York Post)

** Yahoo’s Jerry Yang and his crew were “elated” when Microsoft withdrew its offer — but their joy may be short-lived. (Los Angeles Times) (NOTE – Yang in his own blog vaguely addresses reports of celebration breaking out in Yahoo’s camp:  “No one is celebrating about the outcome of these past three months… and no one should.”)

Ballmer seals all Yahoo exits

ballmer-gestures.jpgMicrosoft dumped its offer to buy Yahoo on Saturday. A closer reading of Microsoft CEO Steve Ballmer’s letter to Yahoo’s Jerry Yang shows Microsoft is content to do nothing less than choke the air supply out of Yahoo’s trachea.

Consider these sweet bon mots in Ballmer’s letter, which is also a thinly veiled salvo at Google:

We regard with particular concern your apparent planning to respond to a “hostile” bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo! today. In our view, such an arrangement with the dominant search provider would make an acquisition of Yahoo! undesirable to us for a number of reasons:

Warner Bros.’s new games guy

martin-tremblay-headshot.jpgMeet Warner Bros’s new video game czar Martin Tremblay, who was named president of Interactive Entertainment.

Tremblay will report directly to Kevin Tsujihara, president of Warner Bros Home Entertainment Group, when he starts in July.

Warner poached Tremblay from Vivendi Games, where he was president of worldwide studios since 2006, during which he oversaw the release of “F.E.A.R”, “Scarface: The World is Yours”, and the “Crash and Spyro” series.