Time Warner Inc. may enter into talks with Sunnyvale, California-based Web pioneer Yahoo aimed at  fashioning a deal to sell off its Internet services group AOL, according to a Financial Times report. On Tuesday Yahoo held its first board meeting including new director Carl Icahn, the billionaire activist investor who gained a seat on the eleven member board as part of a proxy bid truce earlier this year. The Yahoo board approved discussions with Time Warner over plans for its AOL property, according to the report which cited a person familiar with Yahoo's thinking. Carl Icahn And Other Yahoo Board Members Approve Talks The approval to reopen negotiations with Time Warner that had been taking place off and on since last year paved the way for a new examination of various ways that the one time Internet Service Provider powerhouse  AOL could merge with Yahoo, although discussions on a possible deal have not yet resumed according to the paper. Joining Icahn as new members of the Yahoo board that approved new talks with Time Warner in Tuesday's meeting were former Viacom chief executive Frank Biondi Jr. and John H. Chapple, the former president of equity firm Hawkeye Investments LLC. The three joined the Yahoo board in July as part of a settlement agreement that expanded Yahoo's board of directors in a truce that ended months of battling between Yahoo and Icahn over the Sunnyvale company's refusal to accept a hostile takeover bid by Microsoft. According to the Financial Times report, "the Yahoo board approved a new round of discussions with AOL, though active deal negotiations are not underway at this stage." Google Will "Kill" Yahoo Without Microsoft, Icahn Says Time Warner chief executive Jeff Bewkes said last month that splitting AOL into two groups was the company's goal, one centered around media and the other around the ISP market. Some industry observers  have said that Time Warner may sell the entire AOL unit. In addition to the possibility that Yahoo might purchase AOL, previous talks between Time Warner and Yahoo were reported to have looked into a scenario in which Time Warner would invest in Yahoo. Despite a move earlier this week by Microsoft, when it announced that it was buying back $40 billion of its own shares, some analysts -- including Icahn -- have maintained that a deal with the world's largest software maker is the best way to improve Yahoo's outlook and increase stockholder share value. Icahn told CNBC last week that Yahoo would "have to do something with Microsoft or Google is going to kill them." Shares of Yahoo stock remaining below $20 in Wednesday trading, closing slightly higher at $18.93. Last week also saw Time Warner's Bewkes stating that he hoped to come to a decision on plans for AOL "fairly soon," a position seen by some as increasing the likelihood of reopened talks with Yahoo. Time Warner Said To Discuss Sale of AOL Unit To Yahoo Earlier this month AOL unveiled an effort to draw more consumers and advertisers to a refashioned homepage by pulling in more information from third party sites including email previews from Google and Yahoo, and introduced new specialty Web sites focusing on women, parents of children who play video games and fans of popular culture. Those changes were another in a series of moves aimed at shifting AOL's focus from being an ISP to an Internet advertising and content provider, and follow a restructuring plan that saw April layoffs of some 100 people. Estimates have placed the value of AOL's traditional dial-up business at about $3.7 billion and its digital advertising properties at some $10.1 billion, according to a February Sanford C. Bernstein research report, which found that fewer than 35 percent of people using AOL were also subscribers. AOL's traditional dial-up Internet access service lost about 740,000 customers during the fourth quarter of last year, and saw sales fall 32 percent. Since the giant $112 billion merger of Time Warner and AOL in 2001, the firm's strength has largely rested on the shoulders of only two groups, cable television and AOL. Related Links :
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11:18 pm on Sep. 24, 2008 (utc 0)