Yahoo and AOL may be close to a deal that would combine the two into a massive online advertising giant. Meanwhile talk of the deal between Yahoo and AOL is spurring Microsoft to work with News Corp. to make a joint bid for Yahoo. News of the deals comes from a report in today's the Wall Street Journal, owned by News Corp.http://blogs.pcworld.com/staffblog/archives/006780.html
A Yahoo partnership with Microsoft and News Corp., if achieved, would create a powerful Internet partnership linking some of the Internet’s biggest destinations: MySpace, MSN, and Yahoo. Microsoft has been trying to buy Yahoo, but Yahoo has rejected Microsoft’s $42-billion takeover offer.
In related news Yahoo says it will test displaying Google search ads on a small number of its search engine queries, a move likely to be interpreted as the latest in a series of Yahoo maneuvers to resist Microsoft's acquisition attempt.
Either way you cut it, any combo deal that might come out of talks between Google, Microsoft, AOL, or News Corp. are aimed at improving Yahoo's bottom line – not necessarily improving consumer online services. To that financial end all of these deals center around advertising, which has some not so positive privacy implications.
If Microsoft or AOL buys Yahoo what Google doesn't know about you Microsoft will. And what Google doesn't know about Yahoo surfers, if Google and Yahoo partner on advertising, now Google will know just how you use Yahoo.
Another theory bantering about is that a proposed agreement between Time Warner's AOL unit and Yahoo is smart way for Time Warner to dump its ailing AOL division. The Wall Street Journal is reporting Yahoo is considering taking control of AOL and also receive an investment from Time Warner.
As financial analyst Degroof's Zwanenburg told Bloomberg "AOL has been a failure in the past five, six years.. Time Warner would be glad to get rid of it. It's a lame duck."
I can only hope that any merger or partnership between these firms will satisfy the bean counters behind the scenes so product developers can focus on dreaming up cool new Web services.