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Oct 15 2008 11:58AM EDT

Blodget, Swisher Vie for Last Word on Yahoo/AOL

Andrea Chalupa writes: As we reported yesterday, Henry Blodget teased the blogosphere with a post that a Yahoo takeover of AOL could be imminent, then added, maybe not. He claims he has sources that support both sides.

What Blodget was certain of yesterday is that Yahoo could acquire AOL for the hefty price of $8 billion to $10 billion.

This news was seen as Yahoo overpaying for the also-ran AOL and hit the company's stock. Yahoo shares dropped 84 cents yesterday to $12.65 at a loss of 6.2 percent.

Meanwhile, Kara Swisher says a deal will be done, eventually, but a merger should take place only if Yahoo can get AOL for a song.

She suggests Yahoo has every reason to get a good deal and pay low. Swisher points out that AOL's growing weaknesses include a slump in its operating income and the fact that half its revenue comes from the ISP business. There's not a lot of obvious growth here.

"Both [Yahoo] and AOL have got to get busy making their stand-alone businesses shine a lot better than they do now," writes Swisher.

The tea leaves on this one don't seem to be too clear for anyone, so in the meantime, the game will be on the sidelines. Swisher and Blodget will take the lead, going back and forth jumping on any crumb of evidence to be the first to declare the marriage of these two beleaguered Web giants.

Right now, my money's on the BoomTown Crew, which will be spending the day at Yahoo's Sunnyvale offices. Let's see if they spot any AOL-labeled 18-wheelers. 


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