Who knew the search world had it in them and could be so entertaining? According Reuters, talks of selling Time Warner’s AOL to either Microsoft or Yahoo! are heating up. The share prices of all three properties have benefited from the light press of the potential sale.

Sources close to the talks provided Reuters their input on the potential modeling: if a deal with Yahoo were to be struck, it would probably involve merging AOL with Yahoo, with Time Warner taking a minority stake in the combined company. If a deal were to be struck with Microsoft however, it would likely result in the complete sale of AOL. Based on the two options, I see Time Warner going with option A – a Yahoo! merger, but we’ll have to wait and see.  Yahoo’s next shareholder meeting is scheduled for August 1st and if an AOL merger is to come anywhere close to fruition, I speculate news of “next steps” will come closely after that meeting.

written by Beverly Crandon