More turmoil at AOL today, as the technology giant fired the head of its Platform A ad-network business yesterday. Blodget, reporting on the ever-valuable Tech Ticker portal on Yahoo.com’s finance site, says that Curt Viebranz, was canned, but there was little love for AOL's senior management.
One reason why Viebranz was let go was because he forwarded a budget estimate that AOL leaders concluded could not be made. Blodget says the firing is symptomatic of larger problems at the company, saying that AOL “is disintegrating” right now. “There is nothing positive to say about near term performance of AOL – the current CEO has a six-month window or AOL may well be sold to bail out Time Warner.”
Blodget also told viewers that AOL's own media properties are reportedly doing poorly, and the network business, which is doing well, isn't large enough to offset this. “Sources say AOL and Yahoo are continuing to talk about a possible merger, but I still don't think this would be a more attractive alternative for Yahoo shareholders than the Microsoft bid.
Finally, a source tells me that Time Warner's CEO, Jeff Bewkes, plans to give AOL's turnaround until mid-year to show results, at which point he'll sell the company or spin it off.”
Negotiations between AOL and Yahoo are continuing, he adds, and Time Warner is prominently involved. Blodget says that the proposed merger would make great sense, but Yahoo shareholders, who would have jumped at such a deal a year ago, may well decide that AOL isn’t worth it.
The good news for AOL and Time-Warner is that the Microsoft-Yahoo deal may make a play for AOL more favorable. Says Richard Dorfman, managing director of Richard Alan Inc., a New York-based investment firm, Google is the only logical home for AOL. "Frankly, I don't see how AOL goes it alone once the Microsoft-Yahoo deal closes, and the powers-that-be at Time Warner will have no choice but to put it on the block. Unfortunately for them, the list of prospective buyers is a very short one so the price they'll receive will likely be pretty disappointing."
The National Journal reported earlier this month that 2007 was already a record high for mergers and acquisitions in the tech sector. According to the 451 Group, a Boston-based research firm that tracks tech deals, merger volume totaled $476 billion last year.
Time Warner's shares are down in today’s trading session, to $14.74 at 3 PM – that’s off three points for the year and off seven for the 52-week high.