AOL Considers Making Bid for Struggling Yahoo

October 14, 2010

(ChattahBox Technology News) – Neither Yahoo nor AOL is the internet giant it used to be—but if the companies joined forces, the resulting corporation could be better suited to compete against today’s internet behemoths. That appears to be the thinking behind AOL, Inc., which is working with private equity firms to potentially make an offer to buy Yahoo, Inc., according to the Wall Street Journal.

With competition from companies like Google and Facebook, which have chipped away at its display advertising revenue, Yahoo’s current market value stands at $20.56 billion. That’s in contrast to AOL’s market capitalization of $2.68 billion, making an AOL takeover of Yahoo a long-shot unless AOL either finds private equity partners, or Yahoo sells its 40 percent stake in Chinese business Alibaba Group back to Alibaba.

Both options are on the table, with private firms such as Silver Lake Partners and Blackstone Group said to be among the companies interested in working with AOL to make the Yahoo purchase happen, WSJ indicates. On the other side of the coin, Alibaba’s CEO Jack Ma is potentially interested in buying back the portion of his company that Yahoo owns, currently valued at approximately $10 billion.

It was just two years ago that Microsoft mulled making a $45 billion takeover of Yahoo, and after the deal didn’t work out, Yahoo’s CEO Carol Bartz has faced pressure to improve earnings and cut costs. Within the past few weeks, Yahoo has seen several senior employees leave the company, which has only intensified talk of takeovers, WSJ notes. Yahoo will release its third quarter earnings next week.


Got something to say? **Please Note** - Comments may be edited for clarity or obscenity, and all comments are published at the discretion of - Comments are the opinions of the individuals leaving them, and not of or its partners. - Please do not spam or submit comments that use copyright materials, hearsay or are based on reports where the supposed fact or quote is not a matter of public knowledge are also not permitted.