Time Warner terms make Yahoo withdraw from bidding for stake in AOL |
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Published
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Sat, 12 Nov 2005 08:05
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Yahoo has stepped back from the bidding war for a minority stake in Time Warner’s Internet unit AOL leaving the two giants Microsoft and Google as the last two suitors.
Yahoo chief executive Terry Semel said his firm took the decision after meeting Time Warner executives last month and learning the terms of the proposed deal. According to estimates, the deal, if it had came through, would have been worth approx. $13 billion.
Time Warner is expected to choose one of the two suitors next week to begin negotiations.
Software giant Microsoft was the first to make a bid as it sought to upgrade its paid search business by partnering with AOL. Microsoft’s move prompted Google, desperate to protect its revenues from AOL, to team up with Comcast for a bid. Google could not afford to miss this deal as rivals Microsoft or Yahoo, with a stake in AOL, could easily oust the search engine firm from its position of global dominance.
If Time Warner’s asking price seemed too much for a giant like Yahoo, it also seems likely that one of the remaining two suitors will decline from the bidding soon. But for either suitor, losing the deal to the other would be a far greater cost to its own business.
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