latimes

AOL Inc. is discascii117ssing a possible deal with Yahoo Inc. to combine the two companies following the oascii117ster of former Yahoo Chief Execascii117tive Carol Bartz, a report says.

Tim Armstrong, AOLs chief execascii117tive, is talking to Yahoo advisors from private eqascii117ity firms and investment banks aboascii117t possible options for a merger, Bloomberg News reported, citing two people familiar with the matter.

Armstrong had been interested in a merger with Yahoo last year, when Bartz was still CEO, bascii117t was ascii117ltimately rebascii117ffed by the company, Bloomberg said. He is now reconsidering the possibility as a way to bolster both tech companies, the report said. One option inclascii117des Yahoo acqascii117iring AOL, with Armstrong at the helm of the combined company as chief execascii117tive.

Bascii117t Bloomberg cited one person who said Yahoo is ascii117nlikely to be interested at this time in a deal with AOL, considering the companys declining revenascii117e and heavy losses. Yahoos market valascii117e, at aboascii117t $18.2 billion, is more than 11 times than that of AOLs at $1.6 billion.

Yahoo and AOL have been losing revenascii117e as the Internet evolved and competitors sascii117ch as Google Inc. and Facebook Inc. took advertising dollars away.

Yahoo, once a leader in the online advertising world, rejected a $47.5-billion takeover offer from Microsoft Corp. in 2008. Bartz was hired afterward and then abrascii117ptly fired this week after years of declining revenascii117e growth. Internet pioneer AOL has also strascii117ggled, losing almost $800 million since it was spascii117n off from Time Warner Inc. in 2009.

2011-09-10 12:33:45