A Far Out 2010 Scenario: Microsoft Buys AOL

Investment whiz James Altucher has penned a list of predictions for the new year, published today in the Wall Street Journal. Most of his guesses have to do with the national economic picture (unemployment falls to 8 percent), but buried in the list is one striking forecast about the digital media landscape.

Altucher believes Microsoft is likely to swoop in and buy AOL in a bid to compete directly with Yahoo for online audience and display ad share. He points to this chart comparing traffic to AOL.com, Yahoo.com and MSN.com, and notes:

Rather than buy Yahoo for $22 billion it can buy AOL for one-tenth of that and now compete face-to-face against Yahoo. It’s a no-brainer and I expect it to happen in 2010 once the dust settles around its spinoff/IPO from Time Warner (TWX).

It’s an enticing idea, although it requires a big suspension of disbelief for Internet watchers. After all, it was never apparent that Microsoft wanted Yahoo’s audience business (search was always the main thing). What do you think?