IP Democracy: Parsons to Comcast, Google & Microsoft: Just Kidding

According to the New York Times, the highly intriguing talks between Time Warner and potential investors Microsoft, Google and Comcast about those companies’ purchase of a stake in AOL no longer involve…anyone buying a stake in AOL.

Time Warner is purportedly still in negotiations with Microsoft and Google (with Comcast to be pulled in at some later specified time — makes sense - why does Time Warner need Comcast, really?) over other kinds of deals, arrangements that have to do with search pacts. The article contains a heavy hint that Time Warner’s negotiations were geared all along to getting the best terms for AOL on search.

Jordan Rohan, an analyst with RBC Capital Markets, said he felt that Mr. Parsons had always preferred to keep substantial control of America Online and was mainly seeking the best terms for the right to provide search on AOL. “Parsons has done a masterful job of making it look like AOL was for sale when I don’t think it was,” he said. “The most likely outcome is simply an improvement in the terms AOL gets from Google.”

Update: According to the Wall Street Journal, AOL is nearing a deal with Microsoft to mount a service that competes with Google in the online ad arena. Under the deal, AOL would drop Google as its search provider and use Microsoft’s MSN service instead. The two companies would then combine ad sales forces to sell ads across both companies’ Internet properties.

Clearly someone from Time Warner has been blabbing to the press. Both articles mention renegade investor Carl Icahn, who is critical of Time Warner’s management and gearing up for a proxy fight. Icahn is apparently displeased with the idea of Time Warner selling a stake in AOL because such a move puts a dollar figure valuation on the online unit, a value that presumably is too low.

Posted by Cynthia Brumfield on December 6, 2005 9:26 AM to IP Democracy