Following our report that a Time Warner team is talking to Microsoft about an AOL deal, a source tells Reuters that TWX is talking to Jerry Yang and company, too. Or more accurately, said source reminds Reuters that Time Warner has been trying to offload AOL to either company for some time.
We are going to go out on a limb here and guess that said source may work for Time Warner, which wants everyone to know there are multiple bidders here:
Time Warner Inc’s discussions to merge or sell its AOL Internet division with Microsoft Corp or Yahoo Inc have taken on new urgency ahead of Yahoo’s Aug 1 shareholders meeting, a source familiar with the discussions told Reuters on Tuesday.
The structure of any deal is not immediately clear, though a combination of any of the parties is expected to redraw the landscape for advertising on the Internet.
Sources had said earlier that a deal with Yahoo would likely involve merging AOL with the Web pioneer, with Time Warner taking a minority stake in the combined company. A deal with Microsoft would likely be a sale of AOL, the sources said.
As we’ve argued before, AOL/Yahoo is a better fit; AOL/Microsoft is more likely. Because if Steve Ballmer wants AOL, he will always be able to outbid Jerry Yang, protestations of fiscal responsibility aside.