A Far Out 2010 Scenario: Microsoft Buys AOL

Investment whiz James Altucher has penned a list of predictions for the new year, published today in the Wall Street Journal. Most of his guesses have to do with the national economic picture (unemployment falls to 8 percent), but buried in the list is one striking forecast about the digital media landscape.

Altucher believes Microsoft is likely to swoop in and buy AOL in a bid to compete directly with Yahoo for online audience and display ad share. He points to this chart comparing traffic to AOL.com, Yahoo.com and MSN.com, and notes:

Rather than buy Yahoo for $22 billion it can buy AOL for one-tenth of that and now compete face-to-face against Yahoo. It’s a no-brainer and I expect it to happen in 2010 once the dust settles around its spinoff/IPO from Time Warner (TWX).

It’s an enticing idea, although it requires a big suspension of disbelief for Internet watchers. After all, it was never apparent that Microsoft wanted Yahoo’s audience business (search was always the main thing). What do you think?

Reblog this post [with Zemanta]

Related reading