AOL Muscles-In On Yahoo Acquisition Scene

19 February 2008

NEW YORK: Yahoo's rejection of Microsoft's $42 billion (€28.6bn; £21.5) proposal last week has resulted in a number of potential alternative suitors knocking at its doors - the latest being Time-Warner online unit AOL.

The UK's Sunday Telegraph newspaper reported that representatives from the two companies have met to discuss the workings of a possible union.

AOL is following on the heels of Rupert Murdoch's News Corporation, which has apparently offered to buy a 20% spoiling stake in Yahoo, but has ruled out making a full bid.

Details of the AOL/Yahoo discussions are sparse, but a potential problem could be Google's small slice of AOL, which might have US antitrust regulators shaking their heads.

Meantime, a significant Microsoft investor has written to the software giant urging it not to sweeten its bid for Yahoo.

Fund manager Robert Olstein believes the acquisition would be a distraction in its battle with Google for internet supremacy.

Data sourced from BBC Online; additional content by WARC staff