TELECOM Digest OnLine - Sorted: Time Warner and Microsoft Near an Ad Deal

Time Warner and Microsoft Near an Ad Deal

Reuters News Wire (
Tue, 6 Dec 2005 11:00:35 -0600

Time Warner Inc is closing in on a deal with Microsoft Corp. to team
up on an online advertising service to compete with Google Inc, the
Wall Street Journal reported on Tuesday, citing people familiar with
the talks.

The paper said the two companies were now focusing on a deal that
would combine their advertising-related assets, with little or no
money changing hands.

It said they expected to reach an agreement before the end of the
year, but that it was still possible that Time Warner's America Online
unit could strike a deal with competitor Google instead.

Time Warner has been holding talks with both Microsoft and Google over
AOL, sources familiar with the situation have told Reuters and other

Sources familiar with the matter had said that Time Warner's initial
discussions included the possible sale of a stake in the Internet
unit, but recent media reports said that the two likely buyers may be
backing away from such an investment in favor of smaller-scale
partnerships with AOL.

Billionaire investor Carl Icahn, who has been critical of Time
Warner's strategy, has also said that he would hold Time Warner board
members personally responsible if they forged a deal for AOL that
valued the Internet provider too cheaply.

The Journal said that, under negotiations between Time Warner and
Microsoft, AOL would drop Google as its main Internet search provider
and switch to Microsoft's MSN service.

Under their current agreement, Google derived about 11 percent of its
first-half revenue from AOL, which also generates substantial revenue
from the contract.

The Journal said Microsoft and Time Warner are also negotiating to
create a joint advertising sales force to sell online ads across both
the AOL unit and Microsoft's MSN. Both services would remain under the
control of their current owners, according to the report.

People familiar with the talks told the newspaper that the companies
expected to announce a deal by the third week of December.

Copyright 2005 Reuters Limited.

NOTE: For more telecom/internet/networking/computer news from the
daily media, check out our feature 'Telecom Digest Extra' each day at . Hundreds of new
articles daily.

Post Followup Article Use your browser's quoting feature to quote article into reply
Go to Next message: Dave Hunter: "Strowger Switch Identification?"
Go to Previous message: Scott Bradner: "Pity the Poor Phone Company"
TELECOM Digest: Home Page