Looking for love in all the wrong places, Yahoo Inc. and Time Warner Inc. have stepped up talks over creating an alternative to Microsoft Corp.'s unsolicited offer for Yahoo, according to those good folks at the Wall Street Journal.
The talks center on a deal that would fold Time Warner's AOL Internet unit into Yahoo, these people said, though they still consider a Yahoo purchase by Microsoft as the most likely outcome.
• The News: Yahoo and Time Warner have stepped up talks to create an alternative to Microsoft's unsolicited offer for Yahoo, people familiar with the matter said.
• Background: Yahoo and Time Warner had an earlier round of discussions, but talks intensified recently after Yahoo asked for a proposal it could take to Yahoo directors.
• Next Step: If a March 14 deadline holds, any Yahoo and Microsoft talks would likely occur over this weekend.
The Time Warner talks have stepped up as Yahoo tries to nail down its alternatives to Microsoft's Feb. 1 offer, which Yahoo rejected as undervaluing it. The scenario under discussion would involve folding AOL into Yahoo with Time Warner taking a sizable minority stake in the combined entity, say the people familiar with the matter.
They say that Yahoo and Time Warner had an earlier round of discussions, but talks intensified recently after Yahoo went back to Time Warner to ask for a proposal that it could take to Yahoo directors. Time Warner is putting the finishing touches on that proposal now. The people familiar with the matter say that the companies estimate about $1 billion in cost savings annually.
The discussions, which have included contact between Time Warner Chief Executive Jeffrey Bewkes and Yahoo CEO Jerry Yang, are driven at least partly by the idea that uniting Yahoo and AOL, including its Advertising.com business, would create an online advertising powerhouse. Outsourcing Yahoo's search advertising to Google Inc., which handles some of AOL's search advertising and has a minority AOL stake, is not currently part of the discussions, the people familiar with the matter say.
News Corp. and Yahoo, which have been discussing a deal whereby News Corp. would gain a stake in Yahoo in exchange for selling it MySpace and some other Web sites, separately continue to talk about a possible deal, according to people familiar with the matter. These people say such discussions are already advanced, but still considered less likely than a Microsoft purchase of Yahoo. (News Corp. owns Dow Jones & Co., publisher of The Wall Street Journal.)
http://online.wsj.com/article/SB120468830515212763.html
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