Tiny Tim Takes Over AOL–But Does He Have Big Plans?

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About three weeks ago, BoomTown surmised that the they’re-practically-giving-them-away prices for some prime but distressed tech companies–combined with cash hordes by stronger players–would eventually result in some acquisition activity sooner than later.One combination I flagged most prominently, based on several sources, was that IBM would try to grab Sun Microsystems.And today, The Wall Street Journal reported that that was indeed the case. Talks, the story said, were talking place, with a price of about $6.5 billion as a possibility, a 100 percent premium to Sun’s current market valuation.We’re not so sure IBM will pay that much in this market, but it’s a good idea for the pair.Such a deal has been long rumored in Silicon Valley, so I wasn’t the first to suggest such an obvious move, and these talks come as a surprise to very few, which would rescue the long-declining Sun and give heft to IBM’s Internet aims.In fact, on Feb. 26, I wrote:“IBM Buys Sun:I mean someone has to buy Sun Microsystems (JAVA)–now hovering in the $5 a share range with a market valuation of just $3.62 billon–right?But it’s not going to be Hewlett-Packard (HPQ), despite a deal announced just yesterday in which HP will distribute and provide support for Sun’s Solaris operating system on a line of HP servers.Analysts dismissed the deal as meaningless in terms of true revenue, with one noting that it did not mean HP would buy Sun either, especially for its server business, because of redundant hardware products.That leaves, according to many observers I spoke to: IBM (IBM), which competes with Sun in the server business too. Many think the products fit better together and IBM has a $115.3 billion valuation, so the purchase would be doable.The server business is sucking wind, according to a report earlier this week, due to the global economy, so finding safe harbor for Sun is something Wall Street seems to be looking for.Of course, Sun CEO Jonatha...
Mar
18

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This is just too cute to pass up. Apparently, some staffers at AOL are using a teeny-weeny cartoon–seen here–of new CEO Tim Armstrong as the icon on their instant messaging program. It was apparently made for Armstrong by AOL’s owner, Time Warner (TWX). Sorry it’s so little, but the picture gets blurry if made larger. The strapping-in-real-life former Google (GOOG) advertising head took over AOL unexpectedly two weeks ago, after its two leaders, CEO Randy Falco and President Ron Grant, were shown the door. Since he got the job, the big version of Armstrong has been busy making the rounds, even though he does not officially start until April 7. But Armstrong (pictured here in non-superhero form), many sources said, has been talking up many current and former AOLers–many from its glory days–to learn as much as he can about what he needs to do to force the once-mighty online icon back to relevance. He’ll likely start with a spinoff of the service, and sooner than later, especially if the stock market continues to not tank so much. Of course, to make the most of that, it’ll take a bolder strategy from Armstrong than just selling more advertising, getting a better search deal, adding more content and creating new social-networking widgets. In fact, here’s a free tip for Armstrong from someone who has watched the slow-moving AOL train wreck for far too long: Think much, much bigger than a tiny Tim does. More on that, soon…
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