“Who, after all, wants to compete as a sub-scale player - with a less than complete set of Internet assets - in a world dominated by Google and Microhoo?” Citigroup analyst Jason Bazinet wrote last week in a research note. AOL is discussing a merger with Yahoo, while News Corp is reportedly pondering joining Microsoft’s bid as well as pursuing individual talks with Yahoo. It is against this backdrop that talks with Yahoo are taking place. Meanwhile, News Corp’s Fox Interactive Media (FIM), which owns the world’s largest online social network MySpace, quietly started to dial back growth expectations late last year, and now expects fiscal 2008 revenue to fall short of News Corp Chief Executive Rupert Murdoch’s $1 billion target. Time Warner’s stock has suffered through the 7 years since its merger with AOL, even as its restructuring into a one-stop shop for Internet advertising shows early signs of progress.
Both Walt Disney Co DIS.N and General Electric's GE.N NBC shut down their ambitious Internet portals in 2001. Perhaps the days when they can take on Google or Yahoo by themselves have reached their highest point. economy increasingly looks like it might be in recession, concerns about the long-term growth rate of Internet advertising have forced big media companies to reevaluate their role. You’re dependent on your biggest competitor and that’s a terrible position to be in.”īoth MySpace and AOL depend on Google for search advertising.Īs the U.S. “Google’s growing faster than you are and it’s responsible for the majority of profitability for each of these. “MySpace and AOL are Internet assets that are in either a state of limbo or a state of decline,” said Jordan Rohan, founder of digital media advisory company Clearmeadow Partners. REUTERS/Kimberly WhiteĮven if they lose Yahoo to Microsoft Corp MSFT.O - as widely expected on Wall Street - analysts and media industry insiders say the two could explore other combinations including merging Time Warner's AOL with News Corp's MySpace. A woman jogs in front of Yahoo! headquarters in Sunnyvale, California, February 1, 2008.
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