Yahoo! Drops AOL Bid
The Internet giant decided not to pursue buying a stake in AOL after finding Time Warner's proposed terms unacceptable, according to reports in The Wall Street Journal and Reuters. Earlier reports suggested that Time Warner had rebuffed Yahoo! in a bid for a part of AOL's programming arm that valued the operation at $10 billion.
The news comes just a month after Yahoo! joined the bidding for AOL in a development reported by TheStreet.com. The apparently frenzied bidding for AOL struck some observers as a surprise given the company's long-held albatross status at parent Time Warner. Meanwhile, Time Warner is locked in a battle with activist shareholder Carl Icahn and is presumably feeling pressure to act in some fashion to revitalize the once-hot unit.
Google (GOOG), the top search engine, and Microsoft (MSFT), the largest software company, are now seen as front-runners for part of AOL, people familiar with the situation told the Journal. The newspaper also reported that Time Warner may make a decision as early as next week about which company with which it will enter exclusive negotiations.Any potential AOL-Microsoft partnership may face antitrust issues and a deal with Google could include cable giant Comcast (CMCSA), the newspaper said. Yahoo!, which is based in Mountain View, Calif., couldn't immediately be reached before the start of regular business hours. Time Warner spokesman Edward Adler declined to comment.
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