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Microsoft Eyeing AOL?
meriksen writes "This article on the CNN website suggests that Microsoft is looking to acquire AOL. What are the chances and do /. readers think this will ever happen?" The NY Post story is slightly more informative.
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Besides having to sell over Netscape (I think I have $10 here...) wouldn't there be a problem with Microsoft's existing deals with Comcast?
Well, when they deny like that, what additional proof does anyone need that this is pretty much a done deal?
A feeling of having made the same mistake before: Deja Foobar
If this happens: Would they assimiliate AIM into MSN? Or would they ditch it? IMHO they would assimiliate into their network so they don't loose the huge user base AIM has. SirG3
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Ah, the story of life.
AOL is an albatross... Steve Case has been managing an incredibly corrupt firm.
In addition, I think that a merger of this type would have extreme trouble getting through the SEC. This has "monopoly suit" written all over it.
... hi bingo
Unfortunately, this makes excellent sense for Microsoft. When they put together MSN around 1994, it was obvious that they were trying to get in on this action. MSN never succeeded in terms of its weak user base.
Microsoft already has the cash on hand, and AOL Time Warner stock has dropped about 75% since the merger was completed.
This suggests that they're only trying to acquire AOL, not AOL Time Warner - so this wouldn't be the complete media content delivery yadda yadda that they want. However, AOL has a large subscriber base and serves as an awesome potential outlet for Microsoft's content.
But is it a scary thought? Oh hell yes.
-m.
This is typical Microsoft behavior. MSN has always been meant to be an AOL-killer, but despite having the Microsoft promotions machine behind it, they've never come close to defeating AOL. If you can't beat 'em, try to buy 'em.
At least if MS acquires AOL it will pretty much be vulnerable to monopoly claims on a whole new basis.
And if this deal goes down, you can thank the millions of dollars thrown around in back rooms. I can't believe this would ever even be thought of by MS, but they've got some huge balls. The operating system monopoly with the Internet service provider monopoly? (I know there are other ways of getting on the Internet and so do you, but does Billy Ray and Sheila down in Podunk? Besides, 35 million subscribers is not a drop in the bucket, either) Sheesh.... Do you need any more proof that this is a Bad Idea (tm)?
Microsoft would probably keep the MSN and AOL seperate but equal. AOL would become a subsidiary of MSN and, if they're nice, they wouldn't change much, but all the money from AOL would go into Microsoft's pockets. They would have too many issues and would piss too many people off by merging them into one craptacular service.
That's my guess.
I could be wrong, but I don't think they are talking about aquiring the entire AOL Time Warner. Any deal between MSFT and AOLTW would probably only involve a sale of the AOL division to Microsoft. It is no secret that Time Warner has been looking at ways to make the most of AOL while it still can. Selling it to Microsoft, would probably be a very good deal for TimeWarner.
On the other hand, I cannot see the deal being that great for Microsoft. AOL is a dying division in AOLTW, their core market is in dialup, and they don't offer enough to survive (at least in their present size) in a broadband dominated market. Unless of course Microsoft is just looking to get the AOL division on the cheap, and strip it for the few assets it can make some use of.
Why not? They've already proven themselves immune to anti-trust concerns and netscape got the official ax a little bit back. AOL customers are already used to prorietary software and versions of their search and browse capabilities. They're used to prepackaged experiences and very high amounts of ISP marketing.
AOL is a black mark on Time Warner, and they would love to get rid of it. This would vastly increase MS penenatration in the broadband markets and they can expand their strict policies on what can get on the Internet. MS has the cash, AOL has the customers of the type they so desperately want. It's a marraige made in hell. I predict this goes through.
"If this happens: Would they assimiliate AIM into MSN?"
Of course they will. And resistance is futile. All AOL's Base Are Belong to MSN.
It'll take an antitrust ruling to kill this, because MS probably likes the idea of getting all thos AOL users (and IM users, too). For us Linux AIM users, heh, better hope Jabber spreads....
Life is hard, and the world is cruel
At this point Microsoft is only ever going to die the way the fat-man in the restaurant sketch in the Python's Meaning of Life, i.e. gluttony. I believe that the best thing that could of ever of happened to Microsoft, and every computer using consumer on the planet, would have been for them to split their OS division. But the way they are set-up now, one poison pill can make the entire organism sick. Knowing how AOL is run, the only reasonable course of action would be to shut it all down and switch them over to MSN otherwise it's a tar baby they won't be able to get unstuck from.
I'm all for Microsoft getting as big as possible. That way people will know, in lump fashion, what technology to avoid and obviously see the benefits of the alternatives. Also, at some point Microsoft is going to compete with more and more businesses - if you are a competitor, even tangentially, with Microsoft - would you trust 100% a company as aggressive as Microsoft to be the technology foundation of your business?
-_-
America Online acquired Netscape Communications $4.2 billion dollars in 1998 ...
And that $4.2 billion dollars has might as well be written off as entirely lost. Netscape Navigator is more or less a trivia entry in the browser wars, handing off the MS-fighting role to its child named Mozilla. Netscape's now mostly being used as a content portal...
Netscape could fold from the browser business and it wouldn't give a monopoly to Microsoft anymore.
could be very very bad... Say goodbye to AIM!
Microsoft's not that stupid. They'd likely shutter the MSN Messenger operation and transition its userbase over to AIM.
AOL has always been a bigger name than MSN. I highly doubt Microsoft would aquire such a brand image then not use it.
That's because you only watch American television. Try getting some news from more internationally-based sources (like the BBC), and you will see just how biased the American media actually is.
It's not that they taint the truth they are reporting, but they just seem to leave out the other side of the story a little too often..
When I formerly worked with Sprint, and MCI was trying to buy them, it was a God-send that it got blocked. It may prove to be the case here as well. We've already read stories on here about the EU not being Microsoft friendly.
In the end, would it benefit the consumer? I'd be inclined to say, "Maybe, but probably not". The only benefit to M$ shareholders is rolling in the monthly subscriber fees. However, they are from a fickle market: consumers. M$ gets their monthly royalties from a reliable, steady source: businesses. This is part of the reason Nextel kicks everyone's ass in terms of revenue per user (because they identified this marketing trend early and targeted it).
John
(1)Why would Microsoft, who has a failing ISP, want to buy AOL, who is a failing ISP? (2)AOL are in competition with Microsoft.
1) for millions AOL is the internet. and with millions of new subscibers, they direct HUGE traffic towards their sites. remember the smart tags in office. think AOL keywords. bingo.
2) and, you buy them. ain't like microsoft has never done this before.
remember, they are no longer, if they ever were, an innovation company. they have a US market share at which the only direction is down. their foreign share is tenuous at best with the rise of linux and gov't's, etc., becoming increasingly wary of microsoft. the biggest part fo their angst regarding linux is they can't buy it. they can't stop it. and they're not happy. aol just solidifes their hold on US market.
My problem? I was perfectly gruntled, until some numbnuts came by and dissed me.
America Online acquired Netscape Communications $4.2 billion dollars in 1998 ...
That was an example of both a horrible purchase, and horrible brand management. The Netscape name is pretty worth nothing now, since there's really no live product, and just another stupid portal. Like other posters said, AOL is being run into the ground, and the Netscape acquisition is one stellar example of bad management.
Netscape the browser is dead. Mozilla was spun off into Mozilla foundation, seperate non for profit entity. Netscape is now just the budget ISP that AOL offers.
Well.. maybe. Or Maybe not. But Definitely not sort of.
I could be wrong, but wasn't this one of the signs of the Apocolypse?
Seriously though, if Microsoft were to aquire AOL, what would stop them from ISP and OS domination? They could make a big mess for non-windows users to be online in that case... I could see it now:
**Joe user opens www.--------.com**
"We're sorry, this Microsoft Enhanced webpage cannot be viewed on this computer. Do you want to upgrade to Windows OS?"
Business \Busi"ness\, n.;
A scam in which all people involved perceive as beneficial...
I realize you probably have your own answer to that question, but for me, the answer seems simple:
:P
Mind/Marketshare.
Like the other fellow said, for those people who don't know any better, AOL is the internet. When those brilliant souls start making the association "Microsoft == Internet", well... what a huge coup that'll be, eh?
Secondarily, I think MS would love the opportunity to squash Netscape a little more. AOL has toyed on and off with the idea of defaulting to Netscape browser tech; buying AOL would probably mean no further chance of that happening. Just another way to enforce vendor lock-in.
And Nullsoft? WinAmp is dead! Long live WMP!
Just my $0.02.
Don't forget AIM and ICQ. With this deal MS would control all 3 client bases. The move to interoperability could be nice, but at the same time yahoo and whoever else are left out in the cold, and this provides a HUGE userbase for MS in the instant messageing arena.
A mass exodus to Apple or Linux. That's what I'd do for my organization, and I have the power to make it happen. I wonder if Microsoft knows how close some of us are to switching like that? Their credibility is hanging by a thread, and the only thing keeping us from dumping them is how many products of theirs we use and the costs associated with retraining. There are those of us that can make the case to managers that will listen. Once the dollars add up, people are quick to change.
We keep hearing, almost daily, that such and such company is moving to Apple, or that some country's government across the big pond is moving to Linux. It almost seems like the house of cards is beginning to fall. Albeit, slowly, but here and there, it's starting.
Qualitas edurus commercium, nullus penitus net rimor, nullus deus beneficium
This is idle speculation and it is completely unrealistic for all of the antitrust reasons.
1. AOL has the option to buy a large chunk on Google and Google is AOL's preferred search option. AOL promotes Google in their commercials.
It is no secret Microsoft wishes to bury Google with Longhorn.
2. AOL owns WinAmp.
Microsoft getting its grubby hands on WinAmp and other Nullsoft properties wouldn't be allowed. See the European Union's (non Mad Cow) beef with Microsoft and Windows Media Player.
3. AOL owns AIM and ICQ.
Microsoft acquiring either or both of these Instant Messenger platforms would not be permitted. AIM is essentially the standard IM client on mobile phones in America. AIM is also the basis for Apple's iChat software. There are too many parties involved that would object to this.
4. AOL has options to buy Amazon.com stock and owns shares.
'Nuff said.
5. AOL owns shares in TiVo and is a partner.
'Nuff said. See UltimateTV. Also see "WindowsXP Media Center."
6. AOL is an active partner in Sony's plans of offering IM services to the Playstation platform. While this has not happened on the PS2, it is most likely scheduled for the PS3.
Microsoft and the Xbox, not to mention the Xbox Next. 'Nuff said.
7. AOL is a preferred partner with Apple's iTunes.
Microsoft acquiring AOL will again be seen as a move to squeeze Apple out of the market just like over the AIM situation. This will only aide the antitrust lawsuit Real Networks has leveraged against Microsoft.
8. AOL was an institutional shareholder in Palm since the spin-off from 3Com.
Again, Microsoft acquiring AOL would be a headache because this would be yet another example of Microsoft hitting at its various competitors.
The Bush Justice Dept., already burned over the Antitrust Settlement, will in no way allow this to go through.
"Right now, somewhere in this world, Scott Baio is plowing a woman he doesn't love," - Peter Griffin, *Family Guy*
A couple other people have mentioned this, but no one (so far) has really hit it on the head.
What about Mozilla? And Netsacpe?
Now, Mozilla may have been spun off as an independent non-proft, and as one poster above notes, was given $2 million in seed money.
However, is this still *All* the money Mozilla got/gets from AOL? How does Mozilla fund its developers -- there seem to be a lot of people involved, and surely they would have burned through that $2 million already.
Is it true that AOL pays Mozilla money to license the source for inclusion in the (closed-source) Netscape browser?
More on Netscape: even if there are no new versions of Netscape being produced (are there?), wouldn't there be anti-trust concerns? Taking all versions together, isn't Netscape still the #2 browser out there (Most Linux and other Mozilla-based browsers have low marketshare; I don't think Opera and the Mac browser have much penetration, but they may be more popular than the Netscapes). I know all about the regulator capture arguments.. but doesn't this go a bit further? i.e. blocking a buy-out is much easier than splitting a company, and it is quite serious for a company which *holds* an illegal monopoloy in browsers to buy the second-most popular browser.
I don't think the cable/high-speed internet access arguments have much legs, though. The DoJ will probably say that DSL competes with cable modem (even if it doesn't in many areas) and that satellite competes with cable.
I read something like this and I think to myself
Does America have NO anti-competition laws???
In Europe it is highly doubtful a huge predatory company, with a track record such as Microsoft's, would get the EU go ahead to acquire/merge with a company like AOL.
This sig has been deprecated.
Netscape no longer exists as a software company -- it's now a crappy news page and one of AOL's ISP brands.
A bigger problem would be Nullsoft (MS already has EU problems with Media Player).
Actually, I could see Microsoft buying out AOL and it being a sensible business move.
The thing is, they wouldn't be running both AOL and MSN simultaneously. What they'd be paying for is the existing AOL customer base, which they'd then be able to migrate over to their service. (There are a number of ways this could be accomplished, but an "optimal" method might be creating a new "AOL 10" type CD that asks users if they'd prefer the "old AOL style" front-end, or just a direct connection to the Internet without it. This new CD could be modified to connect to MSN's existing phone numbers or gateways, allowing Microsoft to slowly phase out and sell off the hardware they obtained from the AOL purchase.)
As it stands, MSN competes pretty directly with AOL. (The "rest of us" don't generally consider either one a viable option for our internet needs.) If they absorb AOL, they might have enough customers to make it profitable.
Why did HP buy Compaq? Computers are far less profitable than printers and other such accessories. Why did HP want to further dilute its company with marginally profitable computers?
Perhaps the biggest reason was that it funnelled more customers to the more profitable accessories businesses (if I buy a computer from HP, I might as well buy the printer from there as well). Also, the economies of scale in their parts business (both HP and Compaq sell highly proprietary parts which are only available from them--e.g. $300 motherboards for $500 PCs).
Microsoft has been consistently willing to lose money with MSN. If I am reading the article correctly (AOL profits are not separately available easily, since they are a subsidiary; probably available somewhere, but I'm not taking the time to try), AOL is at least currently profitable (albeit decreasingly so). Further, purchasing it more than triples their subscriber base. All the reasons for Microsoft to be in the ISP business at all (presumably to help funnel business back to their profitable OS and office suite lines) are reasons for them to want AOL.
No, I don't think that AOL has anything to teach Microsoft, but that has nothing to do with the potential aquisition. The biggest thing that Microsoft can gain is market share. Next biggest is content, but they will probably look to outsource most of that anyway (they might even leave the content part with Time Warner, as sharing content was the original purpose of their talks).
With recent trends demonstrating that MS is at least trying to better itself as far as quality and long-overdue technical changes are concerned, I must admit to having developed a modicum of respect for it.
But AOL? AOL has never, and has never seriously tried to produce anything other than pure unadulterated crap. AOL's IM survives only because it has a monopoly on the most valuable IM asset: human capital. People are too lazy to switch (not that the other common IM alternatives are exemplary either).
It's as if MS has a corporate team tasked with screwing things up (SCO funding mess anyone?), and a technical team tasked with fixing what has always been screwed up, which would be, well, most of what they produce.
If Microsoft acquires AOL/Time-Warner and Comcast acquires Disney, then Microsoft will effectively control the cable broadcasting and communications market.
.85 votes per share will likely be determined to be unfair, as all shareholders that are brought along in the merger will have not been given opportunity for fair consideration of those terms.
The key to this deal is Microsoft's position as the largest single shareholder in Comcast owning 15% of the companies stock. Compare this to the Roberts family (Ralph Roberts, founder of Comcast, and Brian Roberts, CEO) holdings of slightly over 1% of the company.
If Comcast acquires Disney, then a voting policy dictating that the Roberts family shares are weighted in voting to = 7.5 votes per share while other shares are = to only around
Just think about the future that these two deals could bring us, Microsoft being in control of the vast majority of news, music and recording, movie, and print media in the United States while being capable of dictating the protocols that are used to connect to, and to filter the trafic to and from, the internet.
It's not a tin foil hat theory. It's simply the logical extension of such consolidation of communication and media marketplace under the control of one company that has a rather nasty history of not respecting the wishes of the community that they chose to do business in.
Oh yeah, Paul Allen's vompany Vulcan Northwest Inc. owns a 5% share in Microsoft, so we can probably count Charter Cable and a number of other media and telecom companies as being involved in this as well.
Read, L
I suspect the biggest benefit for Microsoft buying AOL will be to compete against Google for search market share. Currently the market is split between Google, MSN and Yahoo. If MSN take AOL's share from Google they might be able to claim a majority of the search market when they launch their upcoming search engine.
However, there's a chance this will be another case of the European Union blocking a merger that American anti-trust law OKs?
Regardless of what has happened in the past with the DOJ and anti-trust cases, there would be no way that these three aspects of any merger would be overlooked. IANAL, but I would almost guarentee that they would be required to spin off at least AOL IM and Netscape/Mozilla.
So i made my deal w' the devil and went to work for AOL. They're not such a bad devil, and 12 year old girls need internet access too. Now, i think i'm beginning to see the fine print...
After worldcom imploded, everyone looked to put the blame on them, but forget to ask about the partners in crime.
Simlar to the illegal practice of swapping bandwidth at the end of the quarter to inflate the value of the company that worldcom, quest and colt were involved in was also practiced by AOL.
But AOL has been deeply involved in Worldcom, as well as Microsoft with both of them.
Worldcom was also hugly overvalued, and way buying up company left and right, until the bubble burst when the MCI merger blew up.
The real question at hand is, when will the AOL bubble burst?
Or is there more to the Microsoft Worldcom AOL Triangle that will we find out when more people lose thier pension funds?
It is also a question, what is the real value of Microsoft? How much of it is hyperinflated, and what if it turns into another worldcom with cooked books full of accounting tricks. If it is anything like its partners, I would not be suprised if they were involved in such practices with them.
Also, Why is it that microsoft was interested in buying corrupt companies like Worldcom?
Introspection is the key to understanding
Would Microsoft require the company to migrate everything over to Windows? What about applications that have never been built for Windows? Would those applications be replaced as well? With what?
This could be interesting.
"Teleporting Rodents with D-Cell Battery Displacement" theory -- IgnoramusMaximus (692000)
I wonder if the federal government is simply holding off on slapping MS with some serious anti-trust stuff (such as, say, federalizing them) until they've amassed enough of the wealth to turn the US into a much less free country.
~/ssh slashdot.org ssh: connect to host slashdot.org port 22: too many beers
MSN is a money loser as well. But it's important to undertand that Microsoft doesn't "get paid" through direct revenues so much as through the valuation of their stock. And the price of their stock hinges on the perception that they control everything that touches the areas of computing and the internet--and that they will extend that control in the future by leveraging the monopoly. Even today their stock valuation is all out of proportion to their revenues and share price is how the company principals are paid. Everyone who buys MSFT at this point is buying the idea of an unstoppable monopoly that will roll up any competitor or partner in the long run. So it doesn't matter if AOL is a longterm money loser, they are the visible competition and the competition has to be seen being absorbed by MS, or ruined, in order for the MS mythology to sustain itself. Like a shark, MSFT has to continually swim, kill and eat or it will die.
Johnny Quest has two Daddies.
one connection...one network...one OS...
Ein Volk, ein Reich, ein Fuhrer....
coincidence?
Y'know, you blow up one sun and suddenly everyone expects you to walk on water.
The article says TW lawyers don't think there would be any roadblock, but it seems to me a company that's been legally declared a monopoly in one industry should not be allowed to hold a monopoly in another. But I'm funny that way.
"My break dancing days are over, but there's always the Funky Chicken" --The Full Monty
How about a single company controlling AIM, ICQ and MSN IM? I know there's competitors, such as Jabber, but all the same...
Looks can be deceiving. Or CAN they?