Tuesday, February 05, 2008

Rumor: eBay to Make Bid for AOL

The San Jose Mercury News is reporting that eBay or Comcast may be ready to make a bid for Time Warner's AOL unit. The report sets the price at about $10 billion.

"Bay Area cable provider Comcast Corp. and San Jose-based eBay Inc. may be potential bidders for Time Warner Inc.'s AOL, as Microsoft Corp.'s offer for Yahoo Inc. threatens to knock out the two most likely suitors for the Internet unit, Pali Research said."

OnlyeBay, TameBay and myself are the only ones to comment on this, as far as I can see, so I would put this in the "Not Likely" category. In fact it looks like Pali Research just added eBay to their quote to make it sound better. They go on to say; "There's a lack of buyers for AOL, Richard Greenfield, an analyst at Pali Research, said Monday in a note."

I think the rumor started because nobody is really interested in buying AOL and with the recent Microsoft/Yahoo deal it seemed like a good time to float the idea.

If eBay is seriously considering this and I don't believe they are, they have certainly lost it. The new management team doesn't want to make their first deal a stinker worse than Skype. It sounds more like Pali research is trying to stoke the AOL fire a little.

Update: Scot Wingo has some interesting observations, regarding the possibility of eBay acquiring AOL. He makes some valid points in regards to the idea, if eBay wants to remain independent, but in my view, an independent eBay/AOL isn't worth it.

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