Microsoft to Buy Stake in AOL

NetDanzr writes "According to various sources (Bloomberg, Reuters, CNet), Microsoft is in talks with Time Warner to buy a stake in AOL. While the size of the stake or its prize has not been disclosed yet, Bloomberg speculates that this deal would profit both companies. Microsoft would profit from merging the AOL portal with MSN, as a strategy to catch up with his rivals in this space Yahoo and Google, while Time Warner would gain some ammunition in its fight with a renegade shareholder, Carl Icahn. According to CNBC, AOL is just about to turn the corner and is currently the most undervalued division of Time Warner."

Comments

I completely believe the CNBC statement

[seniorcoder]

Why wouldn't a statement come from CNBC declaring this to be a good purchase? It is from such an unbiased source after all.

No, NOOOOO!

[Knight Thrasher]

FIREFOX HAS NO MOUSE GESTURE TO EXPRESS MY HORROR!!!!!!!!!!

This is the single most terrifying news I've heard all week. I'd almost... no, I WOULD prefer an asteroid the size of Texas hurdling at the Earth.

Re:No, NOOOOO!

[RapmasterT]

Might I suggest a finger gesture instead?

Oh no.

[DrEldarion]

Just when you thought the world was safe, evil and evil unite. Been nice knowing you guys. I'm off to read "revelations" to see what's about to go down.

Bye bye Netscape

[RancidMilk]

Does this mark the end of netscape???

Let's see...

[op12]

MSN is not used by more than a handful of people as Google and Yahoo have been doing it better and cover both the cluttered and non-cluttered interfaces (whichever you prefer).

And AOL has been steadily losing members.

Sounds like a match made in heaven.

Microsoft + AOL

[Ann Elk]

Two great things that... uhh... nevermind.

IE lock-in

[phayes]

More probably, buying into AOL is a good way for Microsoft to ensure that AOL never abandons IE for Mozilla...

This is worrying

[gowen]

Given AOL/Netscape's prime role in Mozilla development, I'd suggest this might be a nice plan to slow down the opposition, too. Yes, the Moz Foundation is independent, but the last time I checked, many of the dedicated coders are still AOL employees.

Re:This is worrying

[sspurrier]

Insightful? AOL divested of its contribution to Netscape a couple of years ago. While they still put out a netscape product based on mozilla they are no where near the main contributor to mozilla. Most of the main developers have long since moved on.

i don't get it

[SamSeaborn]

There must be some huge aspect of the internet that I'm just out of the loop on.

I don't use AOL, I don't use MSN ... I hardly even use instant messaging ... I just browse with Firefox and use email.

I hear about how AOL is a major corporation and I wonder ... how? why? I hear that MSN and AOL are apparently merging, and I wonder ... how does that affect me? Why do people care?

Really ... just ... don't ... get it. What am I missing?

Sam

Re:i don't get it

[RealProgrammer]

There is a huge chunk of the online population in the U.S., perhaps most of it, for whom computers are a tool, like a hammer or a radio. They never bother to investigate what else you can do with a hammer besides tack up a picture, nor ever realize that there is more to a radio than "FM 104.3 - your home for today's Country and all time favorites".

For those folks, the Internet is either the little blue "e" or it's AOL. They don't have broadband, but they want it because the marketing geniuses at AOL have been telling them that AOL for broadband is better.

There is another set of users, mostly teenagers, who use either AIM or MSN Messenger to send messages back and forth to their friends' cell phones all day long. It's like passing notes in class, but they do it before breakfast, during breakfast, in the car, between or in classes, and so on. They do homework over it.

The teenagers don't know or care, for the most part, that there are dozens of IM clients and that they all pretty much work. They have MSN or AIM and that's all they need.

A portion of both groups discover eventually that the world is bigger than their little corner of it, but, like programmers using vi to edit CSS, they stick with their original chat and web clients even knowing that there are better alternatives.

I suspect that Microsoft and AOL has some synergy in that environment.

Re:i don't get it

[obender]

like programmers using vi to edit CSS

There's no better way to edit CSS other than vi! Unless of course you are from the other camp...

Re:i don't get it

[cli_rules!]

You mean there's something better than vi??

The end of what ? Anybody remember when...

[OneInEveryCrowd]

Sperry Univac merged with Burroughs at the end of the mainframe era and how that merger turned the mainframe business around ???

Two wrongs

[tompercival]

Is this an example of two wrongs not making a right?

Re:Two wrongs

[Guysmiley777]

This is an example of two great big balls of suck combining to form a critical mass of suck the likes of which have never been seen. The sheer density of suckage will actually tear a hole in the internet.

Re:holy shit!

[Coneasfast]

are you guys going to make some jokes about this?

this is no joke.

hotmail was good, and it was popular.
MS took it over and turned it into the most worst email (the low storage, the spam, the restrictions, etc) service ever. nevertheless, people keep using it because it's what they always used or what their friends use.

now take AOL, something already crappy. i can't possibly imagine what microsoft can do it. maybe this time around people will actually shy away to something else.

Re:holy shit!

[KDN]

Sure, now we're going to be innundated with Windows CD's offering 1000 hours of Windows free with your credit card.

Re:woohoo

[richdun]

Finally putting the two largest scum of the earth together!!

SCO's involved in this?

AOL != Mozilla Foundation

[Beuno]

I do not see how MS buying AOL stock is going to change ANYTHING at all in the Mozilla Foundation.
They are self-sufficient, independent and have been since at least the start of FireFox.
I think there are more programmers working in google then in AOL.

Make peace with any gods you believe in

[Conspiracy_Of_Doves]

The moment the new combined AOL/MSN portal goes online, it will generate a vortex of suck large enough to consume the entire solar system, leaving nothing behind but a cloud of waveforms and probabilities.

Windows + AOL

[rlp]

So when will Gates announce that AOL is "part of the operating system"?

MS was feeling left out....

[MrKahuna]

Oracle buys Siebel.
eBay buys Skype.

Ballmer: (to Bill via bad cell phone connection) Billy-boy, what are we going to do? They're getting more press than us this week.
Gates: Eh? Oh hell! ( as he spills his coffee on his lap and hangs up)
Ballmer: Well, ok if you say so.

Re:Does this mean that AOL...

[ranson]

> Does this mean that AOL will never complete its > planned switch from IE to the browser it owns > (Netscape)?

Don't know where you get your information, but there was never any public discussion of a planned switch. The Compuserve and Mac clients use Gecko, and while it was tested in the WIndows client, an official plan to switch has never been publicly acknowledged. I can assure you AOL will be using IE as the core browser for many years to come (and that was true even prior to the MSN deal talks).

Now that's insightful

[SuperKendall]

I think AOL is more of a Tar Baby than a Death Star style weapon of ultimate power.

Think about it - this is not about AOL per se..

[CdBee]

Microsoft sees its future in the media distribution/licencing business - hence so much R&D of their proprietary secured codecs for audio and video.

AOL is presently owned by Time Warner

Re:New portal names after merging

[Mitchell Mebane]

How about A/S/L, MON?

Re:Heavenly Delight

[Linker3000]

Hey I'm a consultant - break out the champagne!

Their reason

[Cro Magnon]

Microsoft isn't satisfied with the worst portal in the world. Now they want to buy the 2nd worst to guarantee their position.

Re:holy shit!

[JWW]

Hey he was describing hotmail...

Ok, so he should have used absolute worstest!! ;-)

Is it possible that buggy software combines!?

[GecKo213]

Oh great! If this happens we may see the popup window ravage the desktop at all times. When you first sign in to Windows you may now get to see multiple credit card offers and all sorts of popup ads. Not to mention when you log off windows wouldn't let you shut down until the AOL portion of software imbedded has received all of it's needed updates!
Damn the Machine!

Think its about instant message..MSN + AIM

[ubuntu2005]

Probably a nice investment for MS if they can combine their msn messenger users with AOL's instant messenger users. Would be quite dominant, and who knows the services they will think of to generate money from that. I have read countless articles about younger people not using emails these days, and using just instant messaging, noticed this specifically when I travelled to Korea this summer.

Mr Pot? Please meet Mr Kettle.

[Ralph Spoilsport]

MSN and AOL team up? Yeah - there's a marriage made in heaven. How'd you like to be the poor stiff in Bangalore sorting out the crap that's certain to result?

Caller: Hi. I have MSN and my AOL account doesn't work. In fact nothing works.

Banglaore Tech: And sir did you turn the computer on sir?

Caller: Oh. right.

Bangalore Tech: Very good sir. Now kindly go fuck yourself sir. Thank you for calling MSN/AOL tech support, you knuckle dragging imperialist asswipe sir.

RS

Re:holy shit!

[soft_guy]

Sure, now we're going to be innundated with Windows CD's offering 1000 hours of Windows free with your credit card.

This sounds like something that could be used as a deterent to crime.

Judge: "You are hereby sentanced 1000 hours of Windows"
Defendent: "Nooooooooooooooo!"

Probably wouldn't work though. We have restrictions on cruel and unusual punishment. Windows isn't unusual, but it certainly is cruel.

Re:holy shit!

[Coneasfast]

Dude...you just said most worst...incredible...

sorry, proper english can't describe what MS did.

If and when they do merge, they'll need a name...

[jpellino]

So here's the anagrams for AOL and MSN...

MAL ONS - MAL SON - LAM ONS
LAM SON - SALMON - ALMS NO
ALMS ON - SLAM NO - SLAM ON
MA SOLN - AM SOLN - MAN LOS
MAN SOL - MANS LO

"Salmon" has more logo possibilities;
"Slam On!" will appeal to the x-treme and H4x0r crowd,
but "Man, S.O.L.!" is probably closer to what most people think of this development.

Welcome to the New WinAOL OS

[Alien54]

Now combining all of the worst features of both into one incredibly tortured interface.

Can you imagine bootinh windows into the dulcet tones of the AOL Bot saying, "You got Mail?"

Or AOL with the new and improved advanced Clippy the speaking paperclip help technology?

Antitrust anyone?

[zappepcs]

This is possibly a most evil move. MS buys into AOL and has control (of some sort) of the browser market (IE, Netscape, Mozilla funding) but even more evil is that MS buys into several other categories:

Digital content distribution (Time-Warner)
VoIP (Time-Warner networks)
Combined IM markets (AIM/MSN)
DRM on all that content

I hope that those anti-trust government types see this as evil the way that I do. I can't remember what cable companies are tied up in this mess, should it happen, but this is a move by MS to take over communications, digital and voice, as well as a large share of content and content distribution. EVIL EVIL EVIL... that's all I can see in it.

I'm betting that the government will not be able to see the all digital, all-IP future that the FCC and others are trying to create being brought to a corporate congolmeration through moves like this one... Science fiction horror stories happening in real life.

The jokes about MSN and AOL securing MS position with worst portal and search abound, but it proves that most computer users don't care or are clueless. That means that if MS manages this, the world of digital content and communications may become a very bad thing... imagine using an MS phone service? or MSN cable? You'll soon be able to get a BSOD on all your entertainment and communication devices!

EVIL EVIL EVIL!

Re:holy shit!

[Rei]

Hey, I'm glad to hear about this. Kudos to Microsoft for helping unify disparate litigious and malefactious corporate bodies into a single, easier to target entity. Up next: Microsoft to merge with SCO, Haliburton, Monsanto, and the Carlyle Group; to relocate headquarters to the vibrant financial district of Dis.

21 years ago, Warners did the same to Atari

[The Lynxpro]

Its fitting to see that Time Warner is planning on ditching its stake in AOL (just as its turning around) to a *former competitor* in order to boost share price and fend off a corporate raider like Carl Icahn today. 21 odd years ago, Warner Communications, facing a declining stock price and facing a corporate raider named Rupert Murdoch, sold off a 75% stake in Atari Inc. (the home computer/videogame division - later to be known as Atari Corp.) to *former competitor* Jack Tramiel (founder of Commodore) for $350 million in promissory notes in order to take off immediate pressure on Warner's stock. Murdoch eventually bought a controlling stake in 20th Century Fox instead since one of its big time shareholders fled the country on tax evasion. And it was evident even then that Atari was ready for a turnaround with the Atari 7800 ready for the market, hot 8 bit computers in heavy demand (the 1400XL and the 1450XLD) nearing release, a locked agreement to market the Amiga computer, and an almost completed agreement for non-Japanese worldwide rights to the Nintendo Famicom (which became the NES).

Great track record, Time Warner! That's twice in a generation that you've botched the "synergy" payoff from having control of premiere tech companies with mass market appeal. First Atari, and then AOL.

And let's recap the failures of Time Warner with AOL. Time Warner corporate failed to get Time Warner Cable to carry AOL as its premiere ISP, which was the #1 reason why AOL pursued the merger in the first place. Time Warner corporate failed to take any initiative to getting Time Warner Cable to make a deal with TiVo for set-top DVRs even though through AOL, Time Warner held a large stake in TiVo. Time Warner failed to leverage AOL's WinAmp property combined with the Warner Music Group interests...not to mention failing to envision an actual online music store like iTunes and instead relied upon nobody's favorite company Real to make MusicNet a success that it never became. I could list much more, but I'll end it with settling with Microsoft for less than $1 billion the antitrust case that AOL easily would've won the $10 billion they were demanding (and had that figure trebbled) had they committed to fight for the eventual ruling and a good 5 years of appeals.

At this point, I'm all for Time Warner splitting up. Steve Ross must be spinning in his grave and it'll probably take Ted Turner to his well ahead of schedule.

s/Buy/Bury/

[HTH NE1]

Indeed, the headline contains a typo. It should read:

Microsoft to Bury Stake in AOL