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.

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