Yahoo! (YHOO): All Hell Breaks Out As AOL And News Corp (NWS) Move In

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Various press reports indicate that Time Warner (TWX) may be close to combining its AOL unit with Yahoo! (YHOO). At the same time, Microsoft (MSFT) is planning to make a joint bid for Yahoo! with news corporation.

The News Corp options would see MySpace, Yahoo!, and MSN combined.

A Yahoo! combination with AOL would probably use Google’s (GOOG) search technology. The savings from combining the two companies could probably be in the billions of dollars a year.Staff cuts would be part of that. Outsourcing search functions to Google would be another part.

The by-product of these maneuvers is that the price for Yahoo! just went up considerably The company board made a series of shrewd moves.

Douglas A. McIntyre