Apparently, Yahoo CEO Marissa Mayer thinks joining AOL with her company would be ‘Small, Unexciting, Uninspiring And Backward-Looking'. Sounds a bit like my life. But she does have a point I guess.
After she was spotted in a bar last week with AOL CEO Tim Armstrong talking until the early hours of the morning, speculation over - nope not a secret affair - but the merging of the two companies arose.
Although AOL has some useful ad tech that would be invaluable to Yahoo, as well as cash flow from the dial-up business (yep, we forgot that was a thing, too). It also holds many popular media brands, but still has a market cap of only $3.2 billion, compared to Yahoo’s hefty $36 billion. This means that Yahoo would have to pay a premium of about $4 billion in order to buy AOL, and would their amalgamation be the beginning of anything exciting? Probably not, no. With Yahoo facing strong competition from Microsoft and Google, $4 billion is a lot of money to spend on a potentially fruitless investment. You’re going to need a few more cocktails for this one, Tim.
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