Yahoo AOL Merger..does two failing companies make one good company?

There may be a rumor that Yahoo and AOL are merging, but the thing that’s making the news is that Microsoft is trying to buy Yahoo against the wishes of the Yahoo board.

I think it would be a miserable disaster for both—Google and Apple would be the long-term winners. The root of Microsoft’s problems right now is its management structure and its corporate culture, and adding Yahoo won’t solve that—it will add another layer of management structure and corporate culture problems as they absorb Yahoo. Yahoo’s big problem right now is that it’s not nearly as agile as Google is, and that investors prefer a shaky first-place position to a solid second-place position; being acquired by Microsoft won’t put it in first place anywhere. It’s a desperation move by Microsoft, and it’s not very well thought out.

AOL and yahoo are so 1990’s there time is over. I don’t believe they will have a come back. Yay Google

While it is true that Yahoo hasn’t come up anything innovative for a while, Yahoo is still the most visited web site on the internet. It still owns some really good web services like flickr, del.ico.us. Also keep in mind that AOL still owns the most popular chat service in America and also owns tons of popular blogs (like Engadget, Download Squad).

Yahoo and AOL combined can be a formidable opponent for Google and Microsoft. Combining the two services would definitely be powerful. I love Google and I think they are the best and everything – but I think they have it easy. They need some competition from becoming too evil. And this I would like to see some kind of merger.

@cwilbur: how would Apple be a long-term winner due to the AOL-Yahoo merger ? I know they share some common board members but Apple doesnt really have that big of a hold on the internet in terms of web properties (other than .mac).

How about an Apple-Yahoo merger ?

@mirza: Apple would be a long-term winner from a Microsoft-Yahoo merger.

I don’t think anybody would win from a Yahoo-AOL merger, and I think the hassle of having to combine the two companies would suck out a lot of the productivity a merged company might have. Google is firing on all cylinders, and neither AOL nor Yahoo is competing effectively in profit-making areas like search; you don’t beat the person who’s in first place in a marathon by tying the legs of the #2 and #3 people together and making them run a three-legged race.

Further, right now AOL is a shadow of its former self, and is a subdivision of Time Warner; TW management knows what a stupid thing it was to do to buy AOL in the first place—it almost killed TW when AOL dropped in value—and TW management is unlikely to make the same mistake with Yahoo.