It gives them only one thing the effect of size

There are immediate beneficiaries to the trial balloon launched by some investment bankers on the prospects of an acquisition of Yahoo! by AOL. First, the first shareholders, including the title rose yesterday 4.46 at the end in New York; then those site of Chinese electronic commerce Alibaba, which won 1.5 on the stock exchange of Hong Kong and that appears in the light of deal envisaged, as one of the most beautiful asset of the California-based firm. For the rest, it is above all doubt that prevailed yesterday on the realization of such rapprochement.

David against Goliath

According to the schema described by the Wall Street Journal as early as Wednesday evening, several companies of "private equity", SilverLake Partners (Blackstone have already abandoned the "New York Times") are investigating with AOL the opportunity to make an offer to purchase on Yahoo! The idea is not new - the two companies had been language in 2008 in a defensive move against hostile OPA of Microsoft on Yahoo! - but at the time AOL was still owned by Time Warner. This time, it looks rather like David against Goliath, the AOL - now independent and newly rated on the stock exchange stock market valuation - reaching $ 2.7 billion while Yahoo! is 21.3 billion.

To make this feasible, the scenario provides that Alibaba, which is plaintiff, bought his participation in Yahoo! In 2005, it took 40 of the shares in the site of e-commerce for $ 1 billion - which are now valued between 10 and 12 billion. Thus relieved, the assets of Yahoo! would more that 8 to 10 billion dollars, before any "premium", observed the "New York Times". Tim Armstrong, AOL pattern would lead the new structure while Carol Bartz, CEO of AOL, to become President. It would be a reverse merge ("reverse merger") which would be funded by debt.

According to the UBS analysts, "given the potential value of the sale of Alibaba and the conviction of the leaders of Yahoo! that it is undervalued, it seems us unlikely that Yahoo! to sell for less than 22 to 25 dollars the title, which would represent a"premium"between 44 and 64 ". Carol Bartz could also consider a reverse operation - acquire AOL - and prefer to give its stake in Alibaba in the market, at the time that appears the most appropriate. It is the legal Director of Yahoo!, Michael Callahan, who is responsible for the follow-up of this case, with the support of Goldman Sachs.

Common market

To some observers, such rapprochement makes sense. Henry Blodget, Chairman of Business Insider, is for. He explained in a "post" of the "Huffington Post" blog "that it is ridiculous that the two giants of the Internet have not merged." "They should do so immediately." They are the two main rivals for the content and advertising banners (Microsoft and Yahoo! are fighting in the field of research and the Facebook community site has a different model business). By combining their forces, they will attract advertisers, will reduce their costs by avoiding duplicate and have greater leverage with their partners for online research. Yahoo! it would gain even the AOL New York seat, a location in the media.

But everyone sees not only benefits. "What is this merger would help them for the future", asks Erick Schonfeld on Techcrunch. "It does not assist for social networks, not for research, not for mobility and only for local content." It gives them only one thing: the effect of size. And this is perhaps more sufficient.