Henry Blodget suggests that Time Warner should sell AOL to Yahoo!
It’s a good idea, he values AOL at $15B or so, tops.
The problem, however, is that Google paid $1B for 5% of AOL, valuing it at $20B. That deal supposedly made sense then but I never understood it because that $20B paper value was sure to come under pressure as AOL’s business strategy and model grew increasingly unclear.
Moreover, what is especially daunting for Time Warner is that any time it will try to sell AOL, Google will come knocking and showing interest, driving up the price, which then scares away other takers, such as Yahoo!
Frankly, Google is a technology company, AOL is not. Yes, AOL has some interesting technology under its hood, Truveo of note is a fantastic video search technology. The company bought Netscape, so it has the DNA, too. But at its core, AOL is a media company and it is a better fit with Yahoo!
Too bad it sold a 5% stake to Google though. I covered this aplenty last year in Yahoo/AOL/MSFT Menage a Trois? Don’t Count on it…
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