Marketing Pilgrim is reporting from a WSJ article about AOL being prepared for a sale. With the competition for search market share being as fierce as it is, Time Warner is expecting to sell AOL for more than it’s actually worth. Yahoo has already been in discussions with AOL regarding a sale for $10 billion, at least $6 billion more than its true estimated value.
Microsoft is probably in talks with AOL as well since they failed to court Yahoo and have been pretty desparate in finding ways to increase traffic on their network. I also wouldn’t count out Google as a potential buyer, they’ve already invested $1 billion in AOL to keep Microsoft from taking the traffic away from them.
AOL provides a very targeted consumer base for search marketers and any one of the big 3 engines would benefit from the purchase. If the price tag is actually $10 billion, then it’d be valued at a higher multiple than Microsoft’s $44.6 billion bid for all of Yahoo. In terms of search share alone, AOL only has about 4% of overall searches while Yahoo has 21% making a price of $10 billion seem expensive. However, adding 4% market share to Yahoo or Microsoft would be a nice increase in targeted traffic, but more importantly, it would also take 4% of the market away from Google.
We’ll see what happens over the next couple of months as more news trickles in.
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