EarthLink To Aggressively Pursue AOL Dial-Up Merger; Other M&A Hopes

EarthLink, which earlier today reported its Q2 earnings, said that it wants to facilitate consolidation in the dial-up ISP space, including going after AOL’s (NYSE: TWX) dial-up business, which parent Time Warner has already said it is looking to sell off.

CEO Rolla Huff: “We believe we’re best-positioned to be the consolidator in this industry…When an industry reaches a point of maturation and growth stops, it simply makes good economic sense to consolidate into one cost platform.” In a separate interview with WSJ, Huff expanded on this: he said merging the two would create cost savings and better service, benefiting customers as well as shareholders of both companies. “We think it’s worth aggressively pursuing,” he said.

He didn’t clarify if ELNK is in current talks with AOL/TWX, but did say any outcome would depend on the MSFT-YHOO-AOL talks going on right now. As to who else could be rolled up, United Online (NSDQ: UNTD) is another one he mentionded, though it is in the process of buying FTD in a large transaction and probably distracted with that. The MSN, which still has a fast-dying dial-up business. Huff also said it is looking for other acquisitions as well, including in businesses that could include e-commerce, online advertising platforms, Internet-based phone services or wireless broadband.

EarthLink ended Q2 with 2.2 million dial-up subscribers, down 30 percent from the year-ago period. Its broadband division fared better, losing 9 percent of its customers, to end with 1.1 million subscribers.