Kara Swisher

Recent Posts by Kara Swisher

Like BoomTown Said: Yahoo-AOL Talks on Again (But Now It’s Official)

While it was somewhat breathlessly reported that the Yahoo board had “authorized” a plan to talk to AOL about a possible merger yesterday, it’s just a rubber stamp of what has already been going on.

In other words, you don’t need a leak by new board member Carl Icahn to point out the obvious and give it the official nod of approval.

Because neither Yahoo (YHOO) CEO Jerry Yang or Time Warner (TWX) CEO Jeff Bewkes actually has a lot of options.

Both face a rocky next year in the online advertising business, especially in the display business, in which each has more to lose.

Thus, the pair–in a lot of different ways and through a variety of public hints–have been dancing around each other again for weeks now.

As I posted Monday, Yahoo has been looking again at AOL as an important strategic move and as a way to bolster its ad business, international portfolio and email and content offerings.

As I wrote:

Several sources I have spoken to recently have said that Yahoo leadership is very interested in doing such a deal, although not at the $10 billion price tag that Time Warner wants. (Think half and add a little more.)

In addition, there are some daunting regulatory and integration issues–AOL and Yahoo email and messaging combo would be a giant in the space, and the HQs of the companies are on opposite coasts.

But, the deal would give Yahoo some more experienced executives it needs and make it more attractive to others who might not consider going to Yahoo in its present state…

In addition, such a move–which was once opposed by some Yahoo execs–would now be seen as injecting energy into the company.

A Yahoo-AOL combination, however fraught, would still be a powerhouse, which would be bolstered by the 5 percent ownership Google has in AOL and its search partnership with the company.

Of course, that deal would doubtlessly get a lot of scrutiny, especially since Yahoo’s and Google’s impending search-ad deal is under pressure too.”

Let me reiterate what I said above–this is a last-ditch, Hail Mary effort, in the hopes that one plus one will equal something significant, even as the digital sector and the online ad industry it relies on contract in the current economic climate.