The Times is reporting that Yahoo is attempting to restart merger talks with America Online (AOL) as possible way to avoid a potential hostile take over from Microsoft. It is possible this is one of the alternatives that came from the Yahoo board meeting on Friday, where the board has apparently decided to decline the Microsoft bid. I would expect this is not the only possibility that Yahoo is courting though.
Yahoo and AOL held merger talks in the past but were unable to come to an agreement. It is believed the current situation between Yahoo and Microsoft, the impending financial downturn in the US, and Time Warner’s desire to separate AOL from their core content business could make this second round of talks a more desirable and productive conversation.
The Times points out the reality of the situation in which Yahoo may have brought this situation on itself. Last year after having failed discussions with Microsoft about a merger, Yahoo agreed to work collectively with Microsoft to attempt to blunt Google’s growth in the online advertising space. Yahoo apparently has failed to follow through with their pledge or at least not been proactive enough for Microsoft’s taste, which may have directly or indirectly led to the situation we have now.
As I said yesterday each day brings a new and interesting twist to the situation. These are potentially monumental changes for the Internet marketing world. I am sure we will all be waiting expectantly for Yahoo’s next move. Anyone care to fathom a guess as to what it will be?