Yahoo! last week ducked out of the race for America Online because AOL parent Time Warner would not relinquish majority control of the Web portal, and Yahoo! would only offer Internet stock as payment
for the stake, the
Wall Street Journal reports. Apparently, a Time Warner source said Yahoo! had proposed swapping 20 percent of Yahoo! for 80 percent of AOL's content business, which roughly
translates into a $13 billion valuation for the AOL business. Yahoo! said the talks never amounted to any kind of structure for the deal. Time Warner, a little shy about Internet stocks following its
merger-disaster with AOL in 2001, said it wasn't interested in accepting stock as payment. A Yahoo!-AOL deal was always less likely than a deal involving Microsoft or Google, as Yahoo! is AOL's chief
competitor. This leaves Microsoft and Google to fight for a stake in the Web portal; Time Warner is expected to make a decision as early as next week.
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