The Industry Standard - Microsoft acquires AOL - Comments

@TIS, I sure hope judgment

David Kuan — Thu, 02 Oct 2008 07:58:42 -0700

@TIS, I sure hope judgment is made soon to free the frozen $ in this bet.

The find Truth, follow Olaf

ryan peters — Tue, 23 Sep 2008 06:39:36 -0700

The find Truth, follow Olaf Olafsson of Time Warner on this. Don't be surprised if GOOG leaks interest; if things get serious.. Olaf has personal history playing Matador with these 2 calculating bulls. To his credit, a real wizard.with the lance.

I really respect his ability however, the prediction timeline is to aggressive, I'm thinking the strategy will be more complex.

A part of AOL is not AOL. I

Shiv Bhandari — Tue, 05 Aug 2008 13:32:24 -0700

A part of AOL is not AOL. I agree with Garrick.

@Garrick, I like your

David Kuan — Tue, 05 Aug 2008 13:21:01 -0700

@Garrick, I like your suggestion for future M&A predictions. As for this prediction, it would materially change the understanding of this prediction and would not be fair to some who have placed bets. Even though I do not have any position on this prediction, I would much rather see acquisition in parts qualifies for favorable judgement (whether branding is retained or not).

Bradley, thanks for your

Garrick Hileman932530 — Tue, 05 Aug 2008 12:39:08 -0700

Bradley, thanks for your question. TIS should have a general policy on this topic for all our M&A predictions.

What do you think of the below approach:

"Asset sales do not constitute an acquisition unless the firm's brand name is the asset (or one of the assets) that has been sold."

So for example, if MSFT only purchased some portion of AOL's assets - but did not purchase its brand - then the prediction would not be realized. However, if MSFT purchased only the AOL brand and nothing else, then it would be realized.

I like this approach for two reasons: a) simplicity and b) companies trade assets all the time. However, asset sales are distinct from a full acquisition, which allows for a change of control in exchange in exchange for a premium over public and/or book value.

@Bradley, good point. This

David Kuan — Mon, 04 Aug 2008 09:32:34 -0700

@Bradley, good point. This needs to be clarified or judgement will be subject to debate again. It is highly unlikely for MSFT to acquire the dial-up business nor will it attempt to acquire AOL as a whole and then sell of the dial-up (given that the restructure has now taken place). I believe the spirit of the prediction has always focused on the content/advertising assets.

Suggestion to TIS would be to add clarification that can be judged favorable if only the content/advertising assets are acquired.

BTW, I have posted an ancilliary suggestion for Earthlink to acquire the AOL dial-up business.

Clarification: What if it's

Bradley Baker — Mon, 04 Aug 2008 06:07:56 -0700

Clarification: What if it's an acquisition of PART of AOL (say content but not dial-up)?

reference: http://blogs.zdnet.com/BTL/?p=9543

Yes, a JV would not meet the

garrick — Wed, 16 Jul 2008 16:00:50 -0700

Yes, a JV would not meet the criteria of this prediction. Only a purchase of AOL by MSFT.

@Garrick, a joint venture

David Kuan — Wed, 16 Jul 2008 15:19:54 -0700

@Garrick, a joint venture will not make for a favorable judgement, correct? http://www.newser.com/story/32616.html implies potential joint venture rather than acquisition.

Microsoft denies AOL

David Kuan — Wed, 16 Jul 2008 15:19:03 -0700

Microsoft denies AOL acquisition rumor

Microsoft acquires AOL

Garrick Hileman — Wed, 16 Jul 2008 14:34:34 -0700

Judgment: This did not occur in the allotted timeframe. Judged at 0%. -- The Industry Standard

Original prediction:

As suggested in BoomTown's recent post titled "Microsoft's Next Quarry?", following the Yahoo debacle "many expect a bold step from Microsoft in the space now".

Kara Swisher writes:

"While some think Microsoft should stick more to its knitting and buy enterprise companies like SAP, Ballmer and Johnson have been adamant that online ads will be its next great business. Microsoft has been very close to buying AOL before, once even considering spinning its Internet properties and AOL into a newco, so it does know the lay of the land there."

Additional details of this potential deal were revealed today:

"Microsoft, spurned in its recent efforts to buy all or part of Yahoo, wants to explore ways to combine with AOL, according to the Wall Street Journal. The two companies have been discussing a possible deal for months as an alternative to Microsoft buying Yahoo, the Journal reported in its online edition Wednesday afternoon."

This is a prediction that Microsoft will announce its intent to acquire or merge with AOL on or before September 30, 2008.