AOL-Yahoo Merger Deal

As TechCrunch reports, AOL-Yahoo Merger can take place as early as this month!

AOL’s Parent company Time Warner definitely wants this deal to go all the way but it still isn’t very clear whether AOL’s assets will fix any of Yahoo’s current problems.

The deal structure that is currently being discussed is Yahoo’s acquisition of AOL (content, services and advertising), minus their subscription dial up business. That plus a couple of billion dollars in cash from Time Warner gets them approximately a third of the combined entity. Time Warner’s AOL headache is gone, and they have a stake in the world’s most valuable chess piece in the Google/Microsoft search and advertising war.

Points favoring this Deal:

• Both the companies believe Yahoo’s advertising platform would monetize AOL assets far beyond what they’re generating today (a little over $2.4 billion annually).
• Yahoo & AOL has a combined dominance in e-mail market would be substantial (they’d have a combined market share of 48% wordwide according to Comscore, where microsoft in the 2nd position with 42% market share)
• In Instant messaging (Yahoo-AOL has 39% worldwide combined market share, compared to 55% for Microsoft).

But in reality, this might turn into a problem if Microsoft then comes in and buys the combined entity. (Which might actually happen!!~). Will update you if anything actually happens…so stay tuned.