It came in first through one comment in this note, but it’s now relayed in the big media as well. Here quoting Forbes.com:
“ NEW YORK - That there Internet is pretty big business, from what we understand.
And the New York Post reported Thursday that two of America's biggest media and communications companies have plans to synergize their Web businesses. According to the newspaper, Time Warner (nyse: TWX - news - people ) is in advanced talks to sell a stake in its America Online unit to Microsoft (nasdaq: MSFT - news - people ).
The plan would then call for Bill Gates' firm to combine the AOL assets with Microsoft's own MSN, leaving the two companies equal partners in a joint venture. ”
So, after all, opening up the closed walls of AOL’s network to the web has opened up great opportunities. What is unclear here, is whether it’s only an equity stake, or a joint-venture, whether it includes the global operations of AOL (ISP + portal) or just the portal… I would argue that this looks more like an MSNBC deal, although MSN entering again the ISP business would be interesting (Time Warner in the US has quit that business to have Warner Cable concentrate on it, whereas its the telco aspect of the business that is lifting off in Europe).
Now playing: Eric Rice - Behind-the-Scenes of a Home Studio Thing
Update: more here from Forbes.
Update2: Russ has a real neat perspective:
"When I wrote about AOL Rising a few weeks ago, it didn’t dawn on me that what they were really doing is prepping themselves up for a sale. Reports are today that talks are under way with MSN, Google and who knows what the guys two floors down from me at Yahoo! are doing as well.
Google, it seems, would be the most obvious suitor to me. They need everything that AOL already has in order to continue to compete in the online media space. Yeah, they have their Search cash-cow at the moment, but that’s an undefensible lead. The switching costs for someone to move from Google to Yahoo! Search are nil - I should know, I’ve done it, I rarely use Google now and there was no real penalty involved in switching. Google is essentially an advertising company and needs to keep expanding its online media business, or get caught by competitors in the Search space and not have a backup. Snagging AOL would bring along some great assets that Google really needs, including the Netscape name (and campus down the street from Google in Mt. View), AIM, AOL Mail, AOL Mobile, multimedia assets, tons of content and tons of community services as well. Hell, what else is Google going to do with $4b in cash lying around?"
Update 3: the NYTimes is now also carrying the story among many others. It says:
"Microsoft offered to sell its MSN Internet portal and dial-up subscriber business both to America Online and to Yahoo, according to several people with knowledge of the talks. While Yahoo considered and quickly rejected the proposal, Time Warner, the parent of America Online, expressed interest." [...]
"Indeed, much of Microsoft's motivation to do such a deal is to head off a threat it sees from Google. Microsoft's worry is not so much Google's Web search business.Microsoft sees in Google the potential to offer a variety of Internet services, using Google's vast network of servers, making it less necessary for people to buy Microsoft software or even computers with the Microsoft Windows operating system. Moreover, Google could offer free desktop software as well, supported by its network of advertisers."
