Quote(s) of the Day

“We believe there are several trends that could push either AOL or Yahoo towards a major transaction, with each other or with another competitor. Although not without its problems, we believe that an AOL-Yahoo combination is one of the more logical combinations in this arena.”
“Our models suggest purchasing AOL would be accretive for Yahoo! in year 2, even if it were to pay $18bn (20x 2007E EBITDA) for only the advertising portion of its business and assuming only $100mn in cost savings. Purchasing all of AOL would be even more accretive given the low multiple of its access business, but this seems less likely.”
–Merrill Lynch media analyst Jessica Rief Cohen, writing in a note titled “Is 2007 the year AOL and Yahoo are in play?” on what she sees as the (potential) value of Yahoo acquiring (substantial)assets from AOL.
(Via Paidcontent posts here and here.)
Susan sez: Speculations about former portal businesses’ mergers and acquisitions is never-ending, but there’s clear evidence another sprint of consolidation is underway and that both these large businesses could potentially be in play. As both a Yahoo and a former AOLer, I have my own thoughts about the value of this scenario, but I’m going to have to keep them private since I am pretty committed to not speculating about my employer(but clearly committed to pointing out items of note that catch my attention.)

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  1. Marty says:

    Hi Susan, Good thinking to remain personally “mum” on the topic. I just hope investors aren’t treated to another rousing chorus of “1+1=4”. Sometimes these mergers just don’t add up, despite all the PR spin and analyst projections.

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