Yahoo! is exploring its options amid rumors that internet portal AOL wants to buy its larger rival, with financing from private equity groups. AOL famously acquired much-larger media giant Time Warner at the height of the tech bubble and has since been spun off by its former partner. Can it make another go at swallowing a bigger fish — Yahoo is worth about $21 billion, AOL, $2.7 billion — and would it make sense for Yahoo to sign on? (Watch an AP report about the rumored merger)
Two wrongs don't make a right: Tech "dinosaurs" AOL and Yahoo now epitomize "the height of utter irrelevance," says Jon Friedman in MarketWatch, and combining the "once-proud franchises" would be as pointless as "the Mets buying the Cubs." Both tech firms are poorly managed, and neither has been able to keep pace with rivals like Google and Facebook. In the end, "mediocrity + mediocrity = lots of mediocrity."
"AOL-Yahoo: Like the Mets buying the Cubs"
The deal actually makes sense: The "wiseguy commenters" are having a field day, says Dan Gillmor in Salon, "but there's actually some sense in this combination of two admittedly tarnished brands." AOL and Yahoo are primarily in the same business, selling ads over aggregated content, and of the two CEOs, AOL's Tim Armstrong is the one "showing a reasonable clarity of vision." Maybe he can do something with Yahoo's loads of wasted "talent."
"Yahoo plus AOL equals... what?"
Bottom line — not gonna happen: Not only is Yahoo not party to the talks, says John Carney at CNBC, it is reported to have hired Goldman Sachs to help fend off takeovers. Here's my take: The private equity firms approached Yahoo privately and were rebuffed. "So [they] decided to force the issue by making their interest public [via a newsworthy alliance with AOL]. The hope is that the jump in the price of Yahoo stock will create pressure on management to be more receptive to a deal." Well, that "almost never works," and if anything, Yahoo is now "less inclined to cut a deal with AOL."
"Can AOL really buy Yahoo?"
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- The U.S. Marines are developing laser weapons. Here's why.
- How to be the most productive person in your office — and still get home by 5:30 p.m.
- 3 horrific inaccuracies in Homeland's depiction of Islamabad
- Why the Supreme Court is allowing Texas to hold an unconstitutional election
- 43 TV shows to watch in 2014
- How 1,000-year lifespans could remake the economy
- Gamergate has backfired spectacularly on its nincompoop perpetrators
- 6 things the happiest families all have in common
- Ban PowerPoint!
- Why you should absolutely watch this confounding, wonderful World Series
Subscribe to the Week