If the purchase of Yahoo by Microsoft is confirmed (management at Yahoo confirmed they are studying the proposal), my believe is the next financial movement will be Google making a proposal to merge with AOL/Time Warner.
The internet market where Google has a weaker position is the instant messaging, where the leader is AOL with his AIM.
This is not a cash cow market at all, but it is the audiovisual market of Time Warner.
Despite I’ve not ben able to check out the value of the companies, I think AOL value should be around 20 billion dollars, and Time Warner around 85 billion. Google must be around 130 billion.
The user generated contents business is something Google has with YouTube. The market of contents is a huge advertisement asset because of all campaigns of product placement, sponsoring and merchandising that we have seen flourish since Star Wars launch in 1977, and it is necessary to offer a full media portfolio to Google advertisers.
A fusion would not only give Google the participation in Time Warner assets (movies, TV, contents), but also a bigger size to fight face to face in front of Microsoft+Yahoo.
The arrival of Google to mobile market is also confirming this theory. gPhone (android) and the bids for radioelectric spectrum might confirm Google wants to be present and with a good positioning in all media, not only on internet.