RealTime IT News

Is AOL in Microsoft's Sights?

Time Warner and Microsoft are reportedly in advanced talks over Redmond buying a big stake in the media company's America Online unit.

The New York Post, citing two unnamed sources familiar with the negotiations, said the companies are close to an agreement that would have Microsoft acquire a large stake of AOL, with the idea of rolling it into its own Web property, MSN.

Redmond is reportedly interested in buying a 50 percent share of the struggling online business, leaving the two companies equal partners in the venture, according to the report.

A spokeswoman from Time Warner declined to comment. Microsoft was not immediately available for comment.

While the paper reports that executives are looking to complete the deal within a few months, Time Warner is also in talks with Yahoo and Google over a possible sale if the Microsoft merger falls through.

In June, AOL began pushing into the portal space with an ad-supported portal model, hoping to snatch revenue from the growing online advertising market.

However, the company has not followed with a strong marketing campaign to sell the public on the new AOL.

In recent years AOL has been the focus of numerous merger rumors -- including one nearly two years ago that had Microsoft involved -- especially as its net user base has taken a loss of several million over recent years.

Employees have been aware that AOL was on the block, and one employee who asked not to be identified said the continual drop in subscribers had them all worried about their jobs.