Thursday, December 22, 2005

Google, AOL, Microsoft and Buying Share

Had lunch today with a buddy who used to work in MSN Search. He told me that his contacts said that the Microsoft/AOL deal fell apart because of money. He went on to say that he coudn't believe that a company that is a distant #3 in search, with more cash than most small countries and no debt allowed money to be an object.

I played devil's advocate by saying that Microsoft probably set a valuation for AOL and a top price they'd pay and they stuck to their principles.

He went on to remind me that Microsoft at one point valued Overature at $90m, but Yahoo paid $0.5b for it. Sure Yahoo may have over-valued Overature. And we were both sure that Google over-valued AOL. But his point is sound - if you're lagging in a market and can buy your way out of the hole, why wouldn't you?

Tags Google AOL Microsoft

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