5 ms·

AOL Attempting to Buy Yahoo

16 points by lotusleaf1987 16y ago

coryl 16y ago
Hmm, if AOL and Yahoo somehow did merge, that would mean Techcrunch would belong to Yahoo. Would TC still trash Yahoo in their articles?
- shimonamit 16y ago
  Not in the same tone. Certainly not after Arrington's incentivized stay period is up.
olegkikin 16y ago
There's just no way AOL can buy Yahoo. It's impossible. YHOO: 20.56 billion AOL: 2.70 billion Plus AOL is not doing well. They are losing 20-30% of revenues every year for the last 4 years.
- johnglasgow 16y ago
  It's called an LBO.
  - rndmcnlly0 16y ago
    LBO = "leveraged buyout" http://en.wikipedia.org/wiki/Leveraged_buyout http://en.wikipedia.org/wiki/Leveraged_buyout
- VMG 16y ago
  Even though you are wrong it is an interesting fact
- bl4k 16y ago
  Subtract Yahoo's stake in Alibaba from the cap and it becomes $10B. Strip a few more assets and it suddenly becomes viable. AOL have $2.7B in revenue, that combined with an injection of money from a hedge fund or two make an LBO (leveraged buyout) very viable. AOL and the hedge funds would only need to put up $500M-$1B They would reverse-merge Yahoo into AOL, and I have a feeling that the market cap of the new entity would be greater than the sum of its parts. AOL + Yahoo would become the largest content provider on the web, with a global audience. Throw in an ad company or two and you have a good business (and a business with a purpose, unlike Y! atm).
  - jacquesm 16y ago
    > AOL and the hedge funds would only need to put up $500M-$1B That's an interesting use of the word 'only' :) I agree it is a possibility though, but such mergers usually don't work out well in the long run because of conflicting priorities. It's amazing how much staying power these 'old giants' have, it would not surprise me at all if it did happen but I'm more skeptical about the aftermath of such a merger. One thing is for sure, lots of people will lose their jobs. That seems to be the one constant when big companies merge.
    - bl4k 16y ago
      'only' being relative :) And you bet there would be layoffs if this happens. I think the chances of it happening are slim though. They rejected $40B from MSFT, they would look really stupid to accept half of that now (personally I think they should have accepted the MSFT deal, I owned stock at the time)
  - olegkikin 16y ago
    That's some crazy math and economics you got there. First of all, revenues are not profits. That's not the money AOL gets to keep. AOL's expenses eat most of the revenues (http://www.google.com/finance?q=NYSE:AOL&fstype=ii http://www.google.com/finance?q=NYSE:AOL&fstype=ii), even in good quarters. But let's say, AOL had $2.7B. You add $500M-$1B to it. You are nowhere near the $10B you need.
    - bl4k 16y ago
      That is the point, they just need the deposit for the LBO I didn't link revenue to the money they need for an LBO
bigbang 16y ago
An accurate title should be : "AOL Inc. and several private-equity firms are exploring making an offer to buy Yahoo Inc."
nkassis 16y ago
In this case I really think the sum might end up being greater than the parts. I don't how them merging would be worse than both of them on their own. Yahoo has good engineering talent, AOL has some decent content. They feel complimentary to me.
jwegan 16y ago
Both companies have had a rocky ride the past two decades. At least this merger makes more sense than the AOL Time Warner fiasco.
- drgath 16y ago
  Past 2 decades? Yahoo is only 15 years old and was (arguably) the king of the web until '03 or so. The financial slide didn't start until 2 or 3 years ago after a respectable dot-bomb recovery.
ashishb4u 16y ago
Yahoo is actually trying to avoid the takeover. http://www.bloomberg.com/news/2010-10-14/yahoo-said-to-work-with-goldman-sachs-to-defend-against-possible-takeovers.html http://www.bloomberg.com/news/2010-10-14/yahoo-said-to-work-...
stretchwithme 16y ago
weak x weak = won't last a week
- jacquesm 16y ago
  They've been lasting for a very long time already, what makes you say that?
  - stretchwithme 16y ago
    most acquisitions fail and AOL has pretty disastrous recent experience with Bebo. http://www.marketwatch.com/story/aol-loses-11-billion-on-restructuring-costs-2010-08-04?reflink=MW_news_stmp http://www.marketwatch.com/story/aol-loses-11-billion-on-res...
nodata 16y ago
Better get that field full of rakes ready.

16 points by lotusleaf1987 16y ago

coryl 16y ago

Hmm, if AOL and Yahoo somehow did merge, that would mean Techcrunch would belong to Yahoo. Would TC still trash Yahoo in their articles?

shimonamit 16y ago
Not in the same tone. Certainly not after Arrington's incentivized stay period is up.

olegkikin 16y ago

There's just no way AOL can buy Yahoo. It's impossible. YHOO: 20.56 billion AOL: 2.70 billion Plus AOL is not doing well. They are losing 20-30% of revenues every year for the last 4 years.

johnglasgow 16y ago
It's called an LBO.
- rndmcnlly0 16y ago
  LBO = "leveraged buyout" http://en.wikipedia.org/wiki/Leveraged_buyout http://en.wikipedia.org/wiki/Leveraged_buyout
VMG 16y ago
Even though you are wrong it is an interesting fact
bl4k 16y ago
Subtract Yahoo's stake in Alibaba from the cap and it becomes $10B. Strip a few more assets and it suddenly becomes viable. AOL have $2.7B in revenue, that combined with an injection of money from a hedge fund or two make an LBO (leveraged buyout) very viable. AOL and the hedge funds would only need to put up $500M-$1B They would reverse-merge Yahoo into AOL, and I have a feeling that the market cap of the new entity would be greater than the sum of its parts. AOL + Yahoo would become the largest content provider on the web, with a global audience. Throw in an ad company or two and you have a good business (and a business with a purpose, unlike Y! atm).
- jacquesm 16y ago
  > AOL and the hedge funds would only need to put up $500M-$1B That's an interesting use of the word 'only' :) I agree it is a possibility though, but such mergers usually don't work out well in the long run because of conflicting priorities. It's amazing how much staying power these 'old giants' have, it would not surprise me at all if it did happen but I'm more skeptical about the aftermath of such a merger. One thing is for sure, lots of people will lose their jobs. That seems to be the one constant when big companies merge.
  - bl4k 16y ago
    'only' being relative :) And you bet there would be layoffs if this happens. I think the chances of it happening are slim though. They rejected $40B from MSFT, they would look really stupid to accept half of that now (personally I think they should have accepted the MSFT deal, I owned stock at the time)
- olegkikin 16y ago
  That's some crazy math and economics you got there. First of all, revenues are not profits. That's not the money AOL gets to keep. AOL's expenses eat most of the revenues (http://www.google.com/finance?q=NYSE:AOL&fstype=ii http://www.google.com/finance?q=NYSE:AOL&fstype=ii), even in good quarters. But let's say, AOL had $2.7B. You add $500M-$1B to it. You are nowhere near the $10B you need.
  - bl4k 16y ago
    That is the point, they just need the deposit for the LBO I didn't link revenue to the money they need for an LBO

bigbang 16y ago

An accurate title should be : "AOL Inc. and several private-equity firms are exploring making an offer to buy Yahoo Inc."

nkassis 16y ago

In this case I really think the sum might end up being greater than the parts. I don't how them merging would be worse than both of them on their own. Yahoo has good engineering talent, AOL has some decent content. They feel complimentary to me.

jwegan 16y ago

Both companies have had a rocky ride the past two decades. At least this merger makes more sense than the AOL Time Warner fiasco.

drgath 16y ago
Past 2 decades? Yahoo is only 15 years old and was (arguably) the king of the web until '03 or so. The financial slide didn't start until 2 or 3 years ago after a respectable dot-bomb recovery.

ashishb4u 16y ago

Yahoo is actually trying to avoid the takeover. http://www.bloomberg.com/news/2010-10-14/yahoo-said-to-work-with-goldman-sachs-to-defend-against-possible-takeovers.html http://www.bloomberg.com/news/2010-10-14/yahoo-said-to-work-...

stretchwithme 16y ago

weak x weak = won't last a week

jacquesm 16y ago
They've been lasting for a very long time already, what makes you say that?
- stretchwithme 16y ago
  most acquisitions fail and AOL has pretty disastrous recent experience with Bebo. http://www.marketwatch.com/story/aol-loses-11-billion-on-restructuring-costs-2010-08-04?reflink=MW_news_stmp http://www.marketwatch.com/story/aol-loses-11-billion-on-res...

nodata 16y ago

Better get that field full of rakes ready.