OK, so Microsoft appears to have come up short at the expense of new uber-rival Google. According to numerous reports, Google will invest $1 billion in a 5% interest in AOL along with a host of extensions of it's already important partnership. This after widespread speculation that Microsoft was the favorite to land a piece [or all] of Time Warner's bastard internet stepchild.
The specifics [and potential aftereffects] of this deal have been discussed far and wide already, here are a number of the more thoughtful analyses I've come across:
- Ben Metcalfe Blog: What did Google actually get for their $1Bn?
- ZDNet: Looks like Google checkmates Microsoft's AdCenter?
- Michael Parekh: On Google Investing in AOL...Finally
- John Battelle: Yow. Don't Jump the Shark, Google
But one issue I wanted to raise specifically is how long it will take Time Warner to spin out a minority portion of AOL as a tracking stock? They've floated the idea to the Street for some time with divided opinion as to the ultimate value to Time Warner [i.e., how much is AOL really worth these days?].
Well, when the current technology darling [Google] is willing to pay $1 billion for a 5% stake [i.e., a $20 billion post-money valuation], Time Warner shareholders and advisers have GOT to be paying attention.
- AOL Invests in Brightcove: What About Kontiki?
- Kontiki: The Not-So-Secret Sauce in AOL Hi-Q IPTV Venture
Note: At the time of this writing I and/or funds I maintain discretionary control over may be long MSFT, TWX and/or GOOG but were NOT short any of the aforementioned stocks.