Time Warner's board meets today to discuss the AOL deal in particular.
I'd love to be a fly on that wall. Just imagine:
"So, Dickie, what do you think we should do with AOL?"
"Well, guys, the MSN joint venture could create one heck of a competitor to Google and Yahoo. And lets face it Google is worth over $100bn today and their value's only going up. So, if an AOL/MSN portal becomes worth half that, Time Warners share price will shoot up. On the other hand, doing a deal with Google could mean that we ride their coat tails while hanging on to a larger portion of AOL."
"Oh no, it sounds like six of one and half a dozen of the other Dickie. Maybe we should do what all good boards do and postpone the decision to the next board meeting or to next year."
"Yeah, but we have this active investing guy called Carl Icahn crawling all over us and he can be a real pain up the you know where - so I think we should try and make a decision."
"OK, ok lets decide to make a decision at the next board meeting. That's bold for us - eh?"
Come on guys - just go for it. Both are pretty good options, but my gut still says you should go with an AOL/MSN merger. Maybe just try and ensure you have a controlling stake, given AOL is worth more and you have all that lovely Time Warner content. But, I don't think there's really room for 4 global portals in the market - so better that MSN merge with you than say Yahoo!!
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