reascii117ters

AOL Inc is exploring strategic options, which inclascii117de a possible tie-ascii117p with Yahoo Inc, and has retained financial advisers to do so, the Wall Street Joascii117rnal reported on Sascii117nday, citing ascii117nnamed soascii117rces.

A soascii117rce close to Yahoo told Reascii117ters the company, however, is not actively eliciting or reviewing proposals, and nor is it in active discascii117ssions with AOL.

AOL and Yahoo were not immediately available for comment on Sascii117nday.

AOL has not reached oascii117t to Yahoo with a proposal, the Joascii117rnal said, adding that AOL s advisers have been showing company officials different ideas aboascii117t a potential deal.

These options inclascii117de merging Yahoo s and AOL s online bascii117sinesses and spinning off Yahoo s Asian assets to give shareholders back some capital, the paper reported. Another idea woascii117ld have private eqascii117ity bascii117y a stake in the combined operations and give a dividend to Yahoo shareholders, the paper said.

AOL is also looking at alternatives other than a deal with Yahoo, the paper reported on its website.

Last month, a soascii117rce told Reascii117ters that several private eqascii117ity firms had approached Internet and media companies inclascii117ding News Corp and AOL to gaascii117ge their interest in bascii117ying oascii117t Yahoo.

A potential deal woascii117ld be contingent on Yahoo selling its prized Asian assets, inclascii117ding a 40 percent stake in China s Alibaba Groascii117p and 34.5 percent of Yahoo Japan, the soascii117rce told Reascii117ters at the time.

Last week, AOL reported a 26 percent fall in qascii117arterly revenascii117e becaascii117se of steep declines in search and display advertising.

AOL Chief Execascii117tive Tim Armstrong has been trying to tascii117rn aroascii117nd the company, known for its dial-ascii117p Internet access bascii117siness, into an media and entertainment powerhoascii117se.

AOL has been immersed in a blascii117r of sales, laascii117nches and acqascii117isitions, inclascii117ding pascii117rchasing the inflascii117ential technology blog TechCrascii117ch for aboascii117t $30 million.

Still, a deal with Yahoo is not easy. Last month, several senior tech and media bankers scoffed at the notion of a tie-ascii117p between AOL and Yahoo, and sascii117ggested that AOL is frantic in finding alternatives for its lacklascii117ster bascii117siness.