Murdoch's British TV Arm in Talks to Acquire AOL UK

19 July 2006

BSkyB, the British satellite TV monopoly controlled by News Corporation revealed it is in talks with Time Warner with a view to buying the UK arm of AOL.

Clan Murdoch's interest in AOL is not new. NewsCorp number-crunchers have been running their eagle eyes over AOL UK's assets for several weeks after first expressing interest in the ailing UK portal [WAMN: 13-Jun-06].

Tuesday's confirmation of BSkyB's intentions toward AOL coincided with an announcement it had allocated higher-than-expected capital expenditures to cover the cost of recruiting new customers to its extant broadband offering, launched last October.

The cash injection will fund an offer of free broadband access to all BSkyB customers in areas covered by its internet services. Analysts had expected it to offer free broadband only to top-tier pay-TV customers.

Sky Broadband will vend three levels of broadband access, from a free service with speeds of up to two megabits per second to a connection of 16 megabits per second, priced at £10 a month.

Meantime, Rupert Murdoch declared his interest in AOL to be "opportunistic", adding he isn't interested in overpaying for the asset - one of the mogul's standard negotiating ploys.

Many Murdoch watchers, however, believe that AOL UK is what the tycoon wants - really, really wants - to seal his seventy-fifth year on this planet.

Meantime, as ever, he continues to play it cool.

Data sourced from Wall Street Journal Online; additional content by WARC staff