Microsoft/AOL and Love in the Air?

I remember hearing a few weeks ago that Diller would consider selling (formally I immediately thought of 2 suitors Microsoft (Bing) and

Both companies have made deals to increase their reach. Microsoft is making a deal with Yahoo and Aol purchased Bebo. Aol will be out of TWX soon and will need some kind of growth since its ISP business is all but dead.

Both companies need and want for its amazing content and reach of 'eyeballs'. (IACI) has over 50 different branded companies. Most are in the top 5 websites for their niche. Some even have branched out into TV, the CollegeHumor series for one. They also have evite, citysearch,, and zwinky. All of these properties could be expanded on their own or added to an existing property from the potential suitors. Some could even be spun off for a quick return of a portion of the purchase price.

Microsoft has not been the .com darling, they have literally thrown Billions of dollars at the internet with not much to show for it. Aol will always be tainted concerning its failed merger with Time Warner.

Curently, IACI trades at about $19/share with a market cap of $2.25 Billion. I can see Aol or Microsoft making a bid of $25 per share or $3.3 Billion for the entire company and walking away with a nice internet trophy.'

What are your thoughts?

I am long MSFT. I hold no positions in IACI or Time Warner AOL