Yahoo! backs off from its bid for America Online

Yahoo! backs off from its bid for America Online

With Microsoft strengthening their position in the bidding for America Online, Yahoo! has announced their decision of backing off from the bidding war. Yahoo! said in a statement to Wall Street Journal: “After we learned what their proposed deal terms were we passed and we’ve never looked back.”

They also denied that they had officially made an offer for AOL. However, Yahoo! said that their Chief Executive Terry Semel met with Time Warner chairman Richard Parsons in October. An internal source with the media company WSJ claimed that AOL showed no interest in what the Yahoo! was offering it for a stake in the company.

With this update, only Google and Microsoft are now some of the serious bidders in the AOL division of Time Warner. They are both said to be quite serious about their bid in the process with MSN currently having an upper hand. Both companies have the resources and reasons to outdo each other in getting a stake in AOL for expanding their online operations.

WSJ also reported that if AOL goes on with a deal with Microsoft, it would not be a joint venture. Instead, a small-scale partnership is more likely to happen. Google on the other hand is interested in buying a minority stake of the AOL unit, including its shrinking dial-up Internet access business. Comcast is also said to be included in the Google’s offer for AOL.