Speculation continues over the future of the European arm of internet service provider AOL LLC, with the news that Telecom Italia SpA is reportedly interested in making a bid for the European unit.
Telecom Italia said it had made an offer to buy AOL Germany and France. Meanwhile, Versatel, Freenet.de, and United Internet have also said they are interested.
Time Warner Inc, the owner of AOL, is currently conducting a strategic review of the European internet access business of AOL, which does not include its web content. It is thought this strategic review is similar to the review carried out last year for the US operation of AOL.
That review led to the announcement in December by search engine Google Inc which said it would pay Time Warner $1bn for a 5% stake in America Online Inc. The review was prompted by Time Warner’s then strategy to appease shareholders concerned with what they saw as an AOL drag factor on the overall Time Warner business.
The UK satellite broadcaster British Sky Broadcasting Group Plc and former UK incumbent BT Group Plc are reportedly in the running to acquire the UK operation, although both are thought to have reservations concerning the 600m pound ($1.1bn) asking price.
AOL is the UK’s third-largest ISP with 2.2 million customers, of which 1.3 million are broadband customers and the rest dialup. The unit has previously been linked to other buyers such as Vodafone Group Plc, O2 Plc, and the Carphone Warehouse Plc.
AOL Germany’s chief executive meanwhile has said that more than one party was interested in buying AOL’s German internet access business.
There are a number of bidders, Charles Fraenkl told Reuters on the margins of a German multimedia conference in Berlin. He declined to name any of the interested parties.
AOL has 5.9 million customers in Europe, including the 2.2 million in the UK, which is by far its largest European market. There is also a small operation in Spain. The mainland European operations however are moving away from an ISP model to a portal-based business, similar to the US.