John Battelle's Searchblog

John Battelle's Searchblog

I like John's poker analogy. AOL is the flop; MSFT and GOOG are in a biding and bluffing war. The price will not be cheap. YHOO or CMCSA could try to draw out and steal the pot.

MSFT may offer more cash but AOL stands to lose if MSFT cannot bring in the eyeballs the way GOOG can. AOL advertising revenues have been zooming since they opened up their web portal. The reason is that GOOG is bringing the traffic.

GOOG announces earnings on October 20. The price action in the MSFT and GOOG suggest that the winning bidder is going to have to pay big. GOOG has even offered a split deal with CMCSA to make the deal easier to swallow.

It is interesting that TWX has not traded significantly higher. The market knows that TV over IP may hurt the cable companies. I have changed directions a little. Will millions of folks pay $1.99 to watch last nights show? I have anticipated subscriptions. I figured one might pay $4.95 per month to see all CBS shows. At $1.99 per pop, the content revenues could be huge. A cartoon for a $1?

It seems that TWX may be worth more than the current price. I have seen analyst list the TWX components and sum to a total of around $22 per share. The advertising value may make the company worth more.

The mashup that makes the most sense is GOOG--AOL. AIM and Google Talk could go head to head easily against Yahoo--MSFT. Yahoo has a large stable of content, AOL needs GOOG to be able to go head to head with YAHO.