Commentary

Just An Online Minute... Time Warner's End-Run Around Icahn?

After months of swirling rumors about AOL, the latest talk is that Time Warner has changed its mind about selling the company. Instead, Time Warner reportedly is negotiating with both Microsoft and Google about advertising deals.

Today's Wall Street Journal reported that Time Warner and Microsoft are looking to combine "advertising-related assets," without money changing hands. But, the Journal hedged, Time Warner also is continuing discussions with Google, which currently powers search listings on AOL.

The New York Times today also reported that Time Warner is talking with both Google and Microsoft about some sort of ad-related deal. One scenario has Google continuing as AOL's search provider, but giving it a greater cut of the cost-per-click, which the Times pegs as 80 percent at present.

From Time Warner's point of view, the beauty of both possibilities appears to be that neither would set a hard-and-fast value for AOL. Today's Journal highlighted this possibility. Corporate raider Carl Icahn, currently in a battle to wrest control of Time Warner's board, last week publicly warned the company not to sell AOL on the cheap.

Time Warner honchos must believe that if they don't sell the company, they can't be accused of setting too low a price. An ad agreement, as opposed to a sale, then becomes some sort of end-run around the aggressive Icahn.

But, as everyone in the ad industry knows, ad deals also ultimately come with a price tag--albeit one that's harder to calculate. Carl Icahn undoubtedly has mathematicians at his disposal who can perform the calculus.

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