For months there’s been anticipation that some or all of AOL would be sold. Talks between AOL and Yahoo have been ongoing, as they have with Microsoft to a lesser degree. But months ago AOL decided to separate its ISP business (8.7 million subscribers) from its advertising and consumer portal businesses. According to the Wall Street Journal today, the accounting exercise of dividing assets and liabilities between the two sides of the business has now largely been concluded.
That means the way is now cleared for a sale or merger of one or both businesses. The WSJ article suggests both will be sold, with TimeWarner retaining or gaining a minority stake in the company that succeeds or acquires the Platform A and content side of the business.
The article mentions Earthlink as a potential buyer of the ISP business.
The figures cited in the WSJ piece suggest that the whole of AOL is worth around $7 billion, although TimeWarner will be seeking more. The WSJ says that the discussions with Yahoo value the content/ad units at around $10 billion alone. Given some of the overlap and redundancy between AOL and Yahoo, it would probably be a mistake for the company to accept that valuation.
The discussions between AOL and potential suitors are reportedly driven by the desire to boost the market value of TimeWarner, whose shares have been dogged by pessimism about AOL’s prospects and outlook.