Microsoft to buy AOL?

Post ImageA number of publications including the New York Post and Reuters reported this morning that Microsoft is in early talks to make a deal with the AOL unit of Time Warner:

“There have been talks on ways Microsoft and AOL assets can be better leveraged and they’ve taken place over the normal course of business …,” the source said, calling reports of a joint venture “way overblown.”

Although the talks, which have taken place over several months, could advance, nothing was imminent, the source added.

Low-ball estimates for AOL are about $10 billion with improvements possibly doubling that valuation, Richard Greenfield, an analyst at Fulcrum Global Partners, said.

If Microsoft were to buy the assets, you can bet they’d merge it with the MSN unit. Otherwise, the deal could simply be some sort of cross-advertising agreement, which would be good for Microsoft as they’d probably acquire access to the vast content that Time Warner owns. AOL has been dying a slow death for years now, so I’m not sure what Microsoft would want with the company besides advertising and content possibilities.

Read: CNET News.com