There’s lots of speculation and rumor today that Yahoo and AOL are in desperate merger talks (again). Yahoo is hoping to find some alternative suitor to the aggressive Microsoft, and AOL could certainly use the efficiencies that would come from a merger.
To give the talks enough time, Yahoo has delayed a pending board nomination deadline.
Yahoo said the deadline for nominations would be 10 days after it announces the date of its annual shareholder meeting. The previous deadline was March 14.
In a statement, Yahoo said the extension would allow its board "to continue to explore all of its strategic alternatives for maximizing value for stockholders without the distraction of a proxy contest."
While Silicon Alley Insider doesn’t think the deal will happen–despite it making sense for both Yahoo & AOL–there’s another consideration, that I’ve not seen discussed.
If AOL and Yahoo merged, would Google take over their search business? Look at this…
The Times, citing unnamed people close to Yahoo, said a Yahoo-AOL combination has the backing of Google Inc., which owns 5 percent of AOL LLC. and fears a Microsoft takeover of Yahoo.
Ah yes, Google does indeed own 5% of AOL.
Here’s where it doesn’t make sense. An AOL/Yahoo merger should allow the two companies to better challenge Google’s search dominance. So why is Google backing the deal–and not scared of the challenge?
My guess is that if AOL and Yahoo merge, they’ll agree to hand off the search business to Google and instead focus on their portals and web tools.