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?
I'm sure the people in charge at Y! know this, and taking AOL off the market might be a competitive move for us. It'd be a huge coup and marketing bonanza - I can see the headlines now: "Yahoo buys AOL and creates Internet Juggernaut." Right? And remember the previous work history of our CEO and the current owners of AOL. A deal to take AOL off the hands of Time Warner and then partnering with them for online services and content could be done over lunch between old pals. :-)
All this said, the MSN deal doesn't make any sense to me at all. I guess Microsoft is serious about online services and are willing to do whatever they need to accelerate. But folding in AOL into MSN in some sort of JV with Time Warner? Wacky, desperate and ultimately a complete failure. The "SOL" in MSOL would stand for something considerably different than they'd think.
Okay, that's my thoughts for today. (Let me be very clear, by the way, I really *don't* know what Y! is doing - thus I have no qualms about speculating.) What do you think?