Kara Swisher

Recent Posts by Kara Swisher

Will Yahoo and AOL Ever Stop Talking and Make a Deal? (In Related News, Generalissimo Francisco Franco Is Still Dead.)

Back in the first season of “Saturday Night Live,” one running catchphrase uttered by Chevy Chase would always crack the then-12-year-old BoomTown right up: “This breaking news just in: Generalissimo Francisco Franco is still dead.”

It’s that same kind of extreme déjà vu I feel with the continuing drip-drip-drip of the news-less news that Time Warner’s AOL and Yahoo are still talking about a merger.

Both Silicon Alley Insider’s (and soon-to-be AllThingsD.com blogger) Peter Kafka and I wrote extensively about the talks on in mid-September, noting that the discussions centered around merging AOL’s content, advertising and software assets with Yahoo (minus the access business).

There were the price issues–Yahoo wanted to pay between $6 and $8 billion, while Time Warner has long wanted $10 billion–as well as the worries about integration (East Coasties versus West Coasties) and email dominance monopoly problems.

As I wrote on Sept. 23, for example:

That support will be especially important if Yahoo tries to buy AOL, which it is again strongly considering as a way to bolster its ad business, international portfolio and email and content offerings.

Several sources I have spoken to recently have said that Yahoo leadership is very interested in doing such a deal, although not at the $10 billion price tag that Time Warner wants. (Think half and add a little more.)

In addition, there are some daunting regulatory and integration issues–AOL and Yahoo email and messaging combo would be a giant in the space, and the HQs of the companies are on opposite coasts.

But, the deal would give Yahoo some more experienced executives it needs and make it more attractive to others who might not consider going to Yahoo in its present state.

Yang had been pinging a lot of execs over the last year and has had little uptake.

But a stronger and more flexible Yahoo–i.e., it knows it has to change dramatically–would surely be more enticing, especially in a down economy.”

Now comes yet another story yesterday from TechCrunch that the talks are–wait for it–still on.

The story recounted similar details and added even older ideas from previously reported AOL-Yahoo talks (some multi-billion-dollar cash infusion from Time Warner, for example).

And, said TechCrunch, it could happen this month!

Good gracious–October is, like, a really long month. And, if not October, I guess November is good or maybe December. Hey, what about 2009?

Actually, what everyone really would like to know is what the heck is taking Time Warner (TWX) and Yahoo (YHOO) so long, hashing over the same issues (price mostly), especially if it is such a stellar idea?

And, with the economy crashing all around and Yahoo’s and Time Warner’s stock hitting five-year lows, one has to wonder what, exactly, the pair are waiting for?

A more fortuitous reading of the entrails? A sign from the heavens? Better winds?

Well, I hate to inform Time Warner CEO Jeff Bewkes and Yahoo CEO Jerry Yang, but the tide is not turning anytime soon, and both their companies are getting weaker by the minute.

I once called the pairing of AOL and Yahoo a little like leaning two drunks against each other to keep them from toppling over.

Looking back, I will admit that was a little harsh.

Given the stakes now, though–and especially if Yahoo has to abandon its controversial search ad outsourcing deal with Google (GOOG)–it makes sense to combine forces.

In the online ad space, for example, Yahoo and AOL mostly complement each other. The same is true in email and communications tools. And, while Bebo is not the prize Time Warner touted it as, despite paying a king’s ransom for it, Yahoo has no social-networking property.

The only area of true overlap is in content. Here, based on many sources, I would imagine if a deal is ever struck that Yahoo will slash and burn most of AOL-branded properties, keeping only interesting newer brands like sports blog FanHouse, celeb blog TMZ and the Engadget, Tuaw and JoyStiq tech blogs.

And, in fact, if the pair even gets its act together–this or next week would be great for us–it will give them the much-needed impetus to start making the massive cuts needed at both Web outfits for a long time now.

In that regard, look for an AOL exec like its President Ron Grant to be buttonholed to swing that particular ax.

Yahoo, with its less confrontational culture, has never been good at that kind of thing. For all its many flaws, it is a talent AOL will surely bring to the party.

If, of course, Yahoo and AOL ever manage to throw one before they become too much like Generalissimo Franco.

You know: Still dead.


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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work