AOL For Sale (TWX)*

[AMilliONAIRE]

At a meeting with about a dozen senior members of AOL's staff yesterday, Jeff Bewkes left at least one member of management with the impression that the company is for sale, a source close to the company says.

Another person who attended the same meeting says Jeff did not say specifically that the company is for sale but merely said that "everyone is talking to everyone" and that AOL might someday be sold (i.e., that nothing has really changed).

Time Warner spokesperson Ed Adler says the second characterization of Jeff's remarks is accurate. He adds that Jeff's remarks were made in the context of a multi-hour meeting about the state of the industry and AOL.

Regardless of what Jeff said, a rapid sale wouldn't be surprising given the reports of Yahoo-AOL and Microsoft-AOL talks in recent weeks (and again yesterday).

The key question for Time Warner shareholders is whether Time Warner can get a bidding war going. The two most likely bidders are Microsoft and Yahoo, and if Microsoft wants to win that war, it will. A testosterone-fueled competitive Microsoft buyout would be the best possible outcome for Time Warner shareholders, and it might yield up to $15 billion in cash. (Google's ownership of 5% of AOL could complicate matters here--please see this post for details).

If there's only one bidder, meanwhile, and it's Yahoo, Time Warner shareholders will probably be the bewildered recipients of a few billion in cash and about twice as much Yahoo stock, for a total purchase price of around $10 billion (or less).

Another possible but less-likely bidder would be Comcast (CMSCA), which has shown a surprising wilingness to blow billions on marginal Internet properties and has cobbled together a meaningful user base in the last few years. And then News Corp, Google, and others, might also make some noise. (A Google combo would make great sense given AOL's strength in email and IM and Google's move into third-party display ads, but we doubt the company would risk antagonizing regulators by trying to swallow the whole thing. It can win without it.)


AOL CAN SURELY USE A FACE LIFT!