Dulles, Va. - Three days after Microsoft (NASD: MSFT) shocked the technology world with its unsolicited $44.6 billion takeover bid for Yahoo (NASD: YHOO), some pundits and analysts already are predicting that it could negatively affect AOL's (NYSE: TWX) chances of merging with an online advertising powerhouse. In recent years, AOL has staked its future on Internet advertising by de-emphasizing its core Internet access service and acquiring several ad companies, which it has formed into a new dedicated arm called Platform A.

The combination of Microsoft and Yahoo, however, could throw a major wrench into that plan by removing two of AOL's potential suitors, and driving down its value.

"There appears to be no one on the horizon in need of AOL's audience and Platform A capabilities that is willing to pay Time Warner a similar value," wrote Bernstein Research analyst Michael Nathanson, who was quoted by The Washington Post.

Anthony DiClemente, an analyst with Lehman Brothers, told MediaPost that "the deal leaves AOL in a strategic bind."

Unless Google acquired it, "AOL is the odd man out," he said.

Google over the weekend warned federal regulators that the blockbuster acquisition would threaten the "openness and innovation" of the Internet.

Related Links:

Poll: Will A Combined Microsoft-Yahoo! Provide A Better Overall Marketplace For Online Ads?

http://biz.yahoo.com/ap/080201/microsoft_yahoo_aol.html?.v=3

http://snipurl.com/1yz4a (MediaPost)

http://snipurl.com/1yz4b (Washington Post)

http://www.google.com/press/annc/20080203_yahoo-and-future-of-internet.html