It's a pity that AOL
Reuters is reporting that the meandering dot-com portal is exploring the sale of its Internet access business and combining the rest with Yahoo!
Breaking up AOL has been a popular topic for years. Once the dial-up service's premium subscriber base peaked in 2002 -- and AOL reverted to the Time Warner
Every passing quarter makes America Online less valuable to EarthLink
Unfortunately for AOL, EarthLink and United Online may not be interested unless we're talking about fire sale prices. United Online has been diversifying through the acquisitions of Classmates.com, MyPoints, and FTD. EarthLink's digestive process is tied up in a recent meaty acquisition.
In other words, AOL not only took too long to sell its access business -- but its timing is terrible in terms of smoking out a buyer.
The climate is considerably kinder for AOL's online advertising stronghold, though it may be held back by its own fading performance. Revenue and operating profits fell by 26% and 34%, respectively, in AOL's latest quarter, and online advertising revenue actually fell harder than AOL's 24% slide in access-based revenue.
Yahoo! is holding up a lot better, but the two companies can try to make up for their sluggish growth by huddling together under a dot-com Snuggie.
A pairing makes sense, though the original plan -- where private-equity firms would unload Yahoo!'s valuable Asian investments to lower its price tag and let AOL run Yahoo! -- isn't going to go over too well at the considerably larger Yahoo!. The two companies will be stronger together than they are apart, but Yahoo! has to be the one behind the wheel.
It's the only way this makes sense, though one should never underestimate the procrastinating ways of a pair of dot-com old maids. Until reason checks in or pride checks out, we may be here for a long time.
Do you think AOL and Yahoo! will join forces in 2011? Share your thoughts in the comment box below.