Yahoo Looking to AOL to Fend Off Microsoft

Bernie — Thu, 06 Mar 2008 08:07:34 -0500

The Wall Street Journal is reporting (subscription required) that Yahoo is courting Time Warner to combine AOL and Yahoo into a new company, with Time Warner holding a minority stake. The effort is an attempt to either stop Microsoft’s Yahoo bid, or at least force them to sweeten their offer. Whatever the outcome, it appears that Yahoo will enter into some transaction that will significantly alter the online search and advertising industry and will certainly impact the mobile wireless arena as well. Time Warner is reportedly putting the “finishing touches” on a proposal, which will soon be given to Yahoo’s board. In a separate note, Yahoo delayed the nomination process for its board to thwart a proxy fight with Microsoft. See the below video for more details.

The Wall Street Journal postulates that Microsoft is still likely to prevail, despite Yahoo’s efforts to court others, including AOL and News Corp. The implications on the Internet business are somewhat obvious. But a combined Microsoft and Yahoo would become a true wireless powerhouse as well. Both companies have well defined wireless strategies. Microsoft has Windows Mobile which will ship on over 20 million handsets this year. Yahoo has developed a suite of wireless applications that are featured on several wireless carriers including AT&T and T-Mobile. Both Yahoo and Microsoft have an interest in slowing Google’s wireless foray, Android. The next frontier for the Internet, search, and advertising is mobile wireless. Globally, mobile handsets will soon take over as the number one way that consumers access the Internet. Yahoo would be a prized asset for any company looking to effectively compete in this new frontier.

Comcast May be the Next AOL

Bernie — Wed, 15 Aug 2007 10:02:46 -0400

For all intents and purposes, the move from dial-up to broadband by the masses is complete. Sure there are still large numbers of dial up subscribers who have not made the move, but there are now more people who access the Internet via broadband than via dial-up. The remaining dial-up stragglers will either move to broadband eventually or never at all because they don’t feel a need to. The next major Internet transition will be the move to wireless broadband. Adding mobility and portability to the broadband experience is a compelling proposition. One that most subscribers will find enticing enough to join the wireless broadband movement. Service providers that can offer a true broadband experience wirelessly will gain competitive advantage. The future looks bright for companies like Clearwire, Sprint, and winners of the upcoming 700 Mhz spectrum auction.

There are implications for wireline broadband providers. A significant number of subscribers will take one of two paths with their wireless broadband future. They will either abandon their wireline only broadband provider entirely, or migrate to a broadband provider that adds a portability/mobility experience to their wireline service. Does this mean Comcast will be the next AOL? They are the leading wireline broadband carrier with millions of subscriptions and enjoying the limelight of being market leader. They enjoy many accolades from analysts, the press, and Wall Street. Sound familiar? Will they get caught in a wireless broadband transition, much the same way AOL got caught in a dial-up to broadband transition? Maybe, maybe not. If they aren’t already, they would be wise to begin executing a broadband wireless strategy. Subscribers will soon demand a robust broadband mobility/portability experience which either complements or replaces their wireline broadband service. Comcast and companies like them will not be able to rest on their wireline broadband laurels alone. Perhaps a Comcast/Clearwire alliance or merger is on the horizon. Initial impressions of Pivot wireless, the cable/Sprint joint venture, does not lend itself to a robust broadband wireless solution. Maybe Sprint and their cable partners have something up their sleeve, and will extend this partnership to Sprint’s WiMAX strategy. Whatever the eventuality, wireline broadband carriers will need a broadband wireless strategy, or they will find themselves trying to reinvent their business model mid-stride, much the same way AOL is doing today.