Google paid $1 billion in December 2005 to keep its largest single traffic partner (AOL) out of the hands of Microsoft. For that $1 billion, Google gained a 5% ownership stake. Microsoft’s interest in AOL at the time was very real and Google shrewdly kept the company from taking its traffic partner and the corresponding ad revenue.
There will be lots of renewed talk about a hypothetical Microsoft acquisition of Yahoo! as a mutual response to Google’s recent moves. Yahoo! doesn’t want to be acquired (perhaps a strategic alliance or investment is possible); it would be a disaster of integration.
More likely is a renewed discussion between TimeWarner and Microsoft about an acquisition of AOL. AOL is not a technology company, it’s a media company. Microsoft has proven itself to be the former, with a need perhaps for the latter.
I’m completely speculating but I suspect that TimeWarner executives and those in Redmond will be on the phone again to see if a deal can be struck. We’ll see.
Screenwerk 
May 4, 2007 at 2:49 pm
[…] wants to remain independent but, if the terms are right it might do something like this. I’ve also argued that a strategic alliance is more likely than an outright […]
May 5, 2007 at 8:26 pm
[…] position and point of view have consistently been that Yahoo! doesn’t want to be acquired but would potentially consider […]