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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 com

by 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

by bl4k 16y ago

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