"Amid all the speculation about Microsoft (MSFT) buying Yahoo (YHOO), Yahoo buying AOL (TWX), etc., one thing is nearly certain: One of these transactions will eventually take place -- and probably sooner rather than later. Why? Because Google has locked up the No. 1 spot in the sector, and market won't support more than three competitors."
He also gives scenarios where Microsoft (NASDAQ: MSFT) or Yahoo! (NASDAQ: YHOO) would be a buyer of Time Warner Inc. (NYSE: TWX)'s AOL. Previously, Blodget has covered Yahoo! buying AOL and has given other scenarios where AOL could or should become part of a larger company via an acquisition.
But there are some additional issues here to consider. Let's pretend that Jeff Bewkes decided to just jettison AOL. The company still has some dial-up subscribers and it has invested much effort in its advertising platform, now renamed Platform A. Google (NASDAQ: GOOG) made a $1 billion strategic investment and the terms originally dictated that a monetizing event of some sort would come due in early 2008 (that is right around the corner).
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