Boys, A Yahoo - AOL Merger Ain’t Gonna Help

Well now, Yahoo and AOL are back to merger rumors — again. Now it is generally known that the merger of the players down field in a business segment rarely get the uplift they expected on market share post merger. –

SAN FRANCISCO, Oct 29 (Reuters) - Yahoo Inc (YHOO.O: Quote, Profile, Research, Stock Buzz) and Time Warner Inc’s (TWX.N: Quote, Profile, Research, Stock Buzz) AOL unit are looking at each other’s books to figure out how much money they could make together and where costs can be saved, a person familiar with the talks said on Wednesday, indicating a merger may finally be on the way.

While noting a deal was not imminent, the source said the two companies have engaged in “meaningful” due diligence about a possible combination for the past couple of weeks.

Talks are focused on how to integrate AOL’s content and advertising business into Yahoo, said the source, who was not authorized to speak publicly because the discussions are confidential.

• Guys, third rule of the boardroom is if you are going to do a merger for cover you do so BEFORE the fecal matter hits the financial oscillator. Not after
• Yahoo is already in a modus survicus on their own accord. To drop merger money on top of that would be crazy. In the current environment I don’t think Time-Warner is going to push a lot of cash to Yahoo just to eliminate a weak property.
• Were this a year ago under the current situation Yahoo would be ripe for a leveraged carve up on the cheap. Their data center - content hosting and the ad revenue could be sold off. The balance trashed. The only thing holding off something like that is tight money supply at the current time.

Bottom line — perish the thought Yahoo. Time-Warner, just let AOL sink. Its business model is passe’.

Linky.