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In The News

The principals of M&A are quoted regularly and frequently in publications ranging from Business Week and Forbes to the Wall Street Journal, the New York Times, New York Post, Los Angeles Times, and other major publications worldwide. M&A has been the subject of interviews on business-radio and television programs including the Fox Business News, CBS MarketWatch, The TV, Yahoo! Finance TV, Sirius XM Radio, BBC-Worldwide and CNBC. Below are links to a sample of articles in which M&A has been quoted:

Addition of Yahoo to AOL Talks Could Lead to Bidding War

October 2005

Addition Of Yahoo To AOL Talks Could Lead To Bidding War

October 14th 2005

PALO ALTO, Calif. -(Dow Jones)- Yahoo Inc. (YHOO) became the latest Internet company to acknowledge that Time Warner Inc.'s (TWX) AOL unit is worth the fight.
Reports say the popular online Web portal is in early talks to buy a stake in AOL, which runs a dial-up Internet access business as well as its own portal, where people can find games, shopping and news. Yahoo joins Microsoft Corp. (MSFT) and Google Inc. (GOOG) in negotiations for a minority stake in AOL, which has about 20 million U.S. online members. Some estimates suggest that stake could be worth more than $5 billion.

Industry observers offer a variety of explanations why the Internet's big three - Google, Yahoo and Microsoft - would be interested in AOL. Some say the motivation is defensive; others say that the best defense is a good offense and that healthy properties, such as AOL's AIM instant messaging, are a lure.

The addition of Yahoo in what is likely now a three-way negotiation could turn the discussions into a bidding war, with Time Warner coming away with more money than it might have expected. Negotiating alongside Google is cable company Comcast Corp. (CMCSA, CMCSK).

AOL is like available real estate in a shopping mall, and the big anchor stores - Google, Yahoo and Microsoft - are determined to keep each other from it, says Safa Rashtchy, an analyst at Piper Jaffray.

"It's the last remaining portal out there," says Rashtchy, who doesn't own stock in any of the companies, but whose firm has performed investment-banking business for Google in the past 12 months. "You don't want your competitor to get it."

Each of the companies would welcome the online traffic from the portal, especially Microsoft, which would like to steer it toward its Internet search product. AOL presently uses Google search.

But with AOL losing dial-up subscribers as customers migrate to broadband, the unit is a diminishing asset. Analysts say Google would welcome AOL's AIM messenger to expand its own budding product and would like to protect its search-engine relationship with AOL.

A combination between AOL and Microsoft makes a lot of strategic sense, says Ken Marlin, managing partner at Marlin & Associations, an investment bank. The combination of the traffic at AOL and at Microsoft's own MSN portal would lift the company to the number one position in the market and give Microsoft the option of replacing the Google search product.

"It just makes a huge amount of sense for Microsoft," Marlin says.

Despite the loss of subscribers, each of the three companies is also attracted by the still large number of AOL customers, argues Mark Stahlman, an analyst at Caris & Co. Consumers are moving from being passive viewers of entertainment, such as television, to being active consumers of entertainment products, such as music on the Internet, says Stahlman.

Microsoft, Yahoo and Google are interested in luring AOL users to new subscription services, he says.

Analysts believe the addition of Yahoo to the talks could bring a higher price to Time Warner. Rashtchy says a $10 billion to $15 billion value for the AOL business is not unreasonable.

Marlin says the value could be much higher - perhaps more than $15 billion.

Because of the growth of online advertising and the large share of it going to the biggest portals, AOL's value could grow substantially by 2009, to $50 billion or more, he adds.

-By Mark Boslet, Dow Jones Newswires; 650-496-1366;

Copyright (c) 2005 Dow Jones & Company, Inc. Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved.

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