AOL tipped as favourite to buy troubled Compuserve

Internet Service Provider America Online (AOL) has emerged as the hot favourite to purchase Compuserve in a deal that would see two of the top three merge to dominate the home market.

Compuserve CEO Frank Salizzoni has admitted the company was put up for sale by 80 per cent shareholder HR Block after poor results in recent quarters pushed the ISP into financial trouble (PC Dealer, 26 March).

Neither AOL nor Compuserve would comment, but US investment firms have speculated that the two are likely to merge their operations. The merger would give AOL a stronghold in Europe as the company lags behind both Compuserve and Microsoft?s MSN.

One source said: ?Compuserve?s subscriber list is worth more than $9 a share. The last seven insider transactions have been buys.?

AOL has been under pressure from a series of lawsuits bought by its shareholders; this will be relieved if the merger pushes up its stock price. The buy would add 5.3 million subscribers to AOL?s eight million members.