Will Time Inc. Make a Bid that Yahoo Can’t Refuse?

Yahoo! Inc’s core internet being on sale has created ripples in the tech industry and speculation is now rife about who would make the first bid to acquire the company’s core internet business. A report in Reuters said this week that Time Inc, which already publishers magazines such as People, Sports Illustrated, and Time, has been considering making a bid to acquire Yahoo’s core internet arm. The core business of Yahoo is composed of Yahoo Mail, advertising technology, and its sports and news content sites.

Time Inc has reportedly been toying with the idea for several weeks now, Reuters said citing a source familiar with the matter who could not be named because they were not permitted to speak to the media on the matter.

To this end, Time Inc has been in talks with bankers so as to pursue the deal with Yahoo. Despite running prestigious magazines read by millions of people worldwide, Time Inc’s revenue from print advertising has been shrinking. This has prompted the company to make inroads into the digital domain by acquiring online properties and strengthen its digital presence.

In fact, recent moves by the company are testament to this business strategy it hopes to deploy. Case in point: Time Inc earlier in February that it would be buying MySpace, a pioneering in the social networking domain.

However, Time Inc will have to compete with other companies that are expected to raise a bid to acquire the core internet business of Yahoo Inc. The fiercest fight is expected to be put up with Verizon Communications Inc as the company already now owns AOL and has said that it would be interested in owning the core business of Yahoo too. Market analysts have valued Yahoo’s core business between US$6 bn and US$8 bn. The company officially put its core business arm up for sale on Friday.

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