Microsoft Gains in AOL Stakes
On Thursday, it emerged that Yahoo! (YHOO) had dropped out of the bidding for a partnership with AOL, citing the high price tag being sought for the Dulles, Va., Internet property. That potentially slims the race for AOL allies to Microsoft and Google (GOOG), which may be bidding along with media giant Comcast (CMCSA).
But some investors believe Google could end up being an also-ran. Microsoft, the world's largest software company, and Time Warner, the world's biggest media company, share a strong emphasis on intellectual property, says Rob Enderle, a principal analyst with Enderle Group in San Jose, Calif. He notes that Microsoft is fighting against the spread of the Linux free operating system, while Time Warner is battling against Internet pirates.
"The marriage between Microsoft and Time Warner makes a lot more sense based on the history of the business than a Google-Time Warner combination," adds Mark Stahlman, an analyst with New York-based Caris & Co. who rates Microsoft and Yahoo! buy and Google above average.Still, beating Google won't be an easy feat for Redmond, Wash.-based Microsoft. As with all deals, the final issue will come down to price. Time Warner is looking for a partner for America Online, which continues to hemorrhage dial-up subscribers while boosting advertising revenue. Time Warner is looking to boost its moribund share price, which has prompted complaints from dissident shareholder Carl Icahn. "I am not sure everything else combined can trump that," Tony Ursillo, an analyst with Loomis Sayles in Boston who follows the software industry, says of the price issue. "It's a financial transaction first and foremost."
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV