AOL – Yahoo Merger Rumors Gather Steam

Last month, a report on the Wall Street Journal had claimed that AOL was talking to several investor companies in a bid to take over Yahoo. The bid, explained by some as a possible hostile takeover, was majorly scoffed at, though additional reports from Bloomberg noted that Yahoo was in fact aware of such plans and was mulling ways to thwart such an attempt.

Now these rumors have gathered more steam with a report from Reuters claiming that AOL Inc. is now working out a way to tie-up with Yahoo to consolidate the online advertising business of the two companies.

“These options include merging Yahoo’s and AOL’s online businesses and spinning off Yahoo’s Asian assets to give shareholders back some capital, the paper reported. Another idea would have private equity buy a stake in the combined operations and give a dividend to Yahoo shareholders, the paper said.”

With AOL having reported a 26% decline in their quarterly revenues, it is not clear whether such aggressive attempts from the company management would be approved from the board, but it will be interesting to see how the future shapes up for AOL, and Yahoo.