Scott Davison, a former senior vice president with AOL LLC, admits he's out of the loop regarding a potential merger between the Time Warner Inc. [
TWX] Internet unit, and Yahoo! Inc. [
YHOO], a
story that refuses to go away. But he still sees plenty of value in AOL. "They still have a lot of eyeballs that get passed on in that network," says Davision, who is now president of laser manufacturer
Raydiance Inc., which this week raised an additional
$20 million in venture capital (Raydiance is led by former AOL chairman and CEO Barry Schuler.)
"It's going to end up being an important player in one of these
configurations, but it's anybody's guess which one."
Unlike some critics, Davison doesn't blame Time Warner for not pursuing a more aggressive broadband strategy after the companies merged in 2001. "It's hard to take a massively profitable division and say, `You know what, instead of making $19 a month per user, I'm going to start to lose $5. You can't do that on Wall Street," he says. "The way they've gone is not a bad or dumb path--they just had such a high profit in subscriptions."
Despite speculation that Yahoo! and Time Warner might struggle settling on a price for AOL, talks reportedly are ongoing. Of course, Time Warner could simply be trying to entice another buyer to step up, while Yahoo! might be hoping that its extended flirtation with AOL lures Microsoft Corp. [
MSFT] back into acquisition talks.
--David ShabelmanSee Nov. 19 post from Tech ConfidentialSee Nov. 20 story from Bloomberg
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I have heard that James Kennedy is being rumored around as the next Yahoo CEO. This is what Yahoo needs in my opinion, an experienced deal maker.