Is Jeff Bewkes Now the Belle of the MicroHoo Ball?
Now, Time Warner CEO Jeff Bewkes is a very natty executive.
But Bewkes (pictured here) is definitely looking 333 percent prettier to both Yahoo and Microsoft this morning, as their 2,365th round of talks to partner in some way–if you could call them that–collapsed yet again with more he-said-he-said recriminations.
Now, both Yahoo (YHOO) and Microsoft (MSFT) have got to be hightailing it across the dance floor to block the other from making a possible move on AOL.
Because AOL is essentially–as one source close to the company describes the once-mighty-now- not-so-much company–”the number two choice of both of them.”
As the song goes, if you can’t be with the one you love/hate…
Thus, with its Platform A online advertising unit, along with still-strong communications and revived content assets, AOL is probably the best alternative both Microsoft and Yahoo have to each other.
The online assets of News Corp. (NWS)–specifically, its giant social networking site, MySpace–do fit nicely into a deal in which the content, communications and display advertising assets of Yahoo are spun off from the search unit that Microsoft would snap up.
But AOL has more substantive offerings, including overpaying for the Bebo social network recently, with either going it alone.
According to sources at all three companies–as usual–there are lots and lots of discussions going on. Microsoft likes AOL. Yahoo likes AOL.
And Time Warner (TWX) likes anyone who will take AOL off its hands and fork over about $10 billion.
Despite more aggressive efforts of late, AOL execs still struggle against the larger players to sell its large swaths of inventory, especially in the face of larger competitors.
And, no matter what it says, its corporate parent Time Warner would rather sell AOL than make the kind of investments and, more importantly, short-term revenue sacrifices it would take to truly compete.
If BoomTown had to pick, I think–despite the fact that some Yahoo execs have had disdain for AOL–that it is a better cultural and strategic fit for the company than Microsoft is.
That said, Microsoft could provide the company with a lot more investment and heft that the AOL brand needs to revive itself.
In any case, it will be interesting to see what Bewkes can do to take advantage of the continuing cold war between Yahoo and Microsoft.
Of course, even though this uncertainty probably makes this the best opportunity to make a deal, wading into the briar patch is also risky for Time Warner.
But one interesting scenario popped into my head: If Microsoft bought AOL before Yahoo’s annual meeting, it would likely cause Yahoo’s already volatile stock to tank, giving advantage to billionaire investor Carl Icahn’s proxy fight.
Once Icahn wins control of Yahoo, he could then merge the content and communications units with those of the online assets of the now-much-more-desperate News Corp. (owner of Dow Jones and of this site).
A full sale to Microsoft would be impossible, because of the massive regulatory issues around combining AOL-Yahoo-Microsoft dominant online communications products.
But Icahn could sell the search business to it and then do a commercial deal to allow Microsoft to deliver ad search revenue to them all.
And, best of all for Microsoft, who does that now?
For AOL, Google. For Yahoo (pending), Google. For News Corp.’s MySpace, Google again.
To get the chance to oust Google three times in a single move, perhaps makes Bewkes the one Microsoft should really be courting.
After all, tomorrow is another day.
Also, here are video highlights of an interview I did with Bewkes at the D: All Things Digital conference in late May:
Please see this disclosure related to me and Google.