AOL & Yahoo: No Merger, No Cry

    December 28, 2006
    WebProNews Staff

In a world of scenarios and a slow news week, chatter about a possible AOL/Yahoo merger has crested the waves and face-planted itself upon the sandy shores of consideration.

The potential for a hookup consisting of Yahoo and AOL has been the mildly warm topic of discussion recently. This comes a year after Yahoo backed off a potential deal with AOL, ahead of Google’s aggressive push that shunted Microsoft aside for the search and advertising prize.

AOL didn’t make sense for Yahoo a year ago. It doesn’t make any more sense today. The duplication of effort within Yahoo would be compounded by merging with AOL. Video search would be just one battleground – would the new company support Truveo/SingingFish, or Yahoo Video Search?

Before they could merge, Yahoo would have to trim down doubled-up product lines like Flickr and Yahoo Photos before they could think of telling AOL to shut down its photos site.

Then there would be the question of leadership, as Valleywag observed. With plenty of big egos in play, who would win? Terry Semel, accustomed to Hollywood star treatment? Randy Falco, accustomed to having a PA handle his email?

Sue Decker has been touted as an odds-on choice to run Yahoo should shareholders finally understand that Yahoo’s performance under Semel has yet to match his compensation package. Blogging Stocks noted how the ex-Warner Bros man has made $429 million selling stock options for the past three years.

Even if Decker is not a keenly honed tech guru, she doesn’t have to be to take the big corner office. Google has worked out pretty well by keeping CEO Eric Schmidt’s hands out of the secret sauce. Decker just needs her own Sergey and Larry to inspire the Yahoos to greatness.

AOL is still pretty tied up with Google, something we noted in December 2005 regarding a possible AOL IPO on or after July 1, 2008. That would be mandatory under rights held by Google, and would be the icing on top of the ad revenue gained from AOL properties during the two year, one billion-dollar investment made by Google to keep AOL away from Microsoft.

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David Utter is a staff writer for WebProNews covering technology and business.