AOL Said to Discuss Deal With Yahoo Advisers
AOL Inc. (AOL) Chief Executive Officer Tim Armstrong is talking with advisers to Yahoo! Inc.
to gauge its
interest in combining the companies after the ouster of CEO
Carol Bartz,
according to two people familiar with the matter.
Armstrong is discussing options for a combination aimed at
strengthening the two Internet companies,
said the people, who
wouldn’t be identified because the talks aren’t public.
He has
talked with private equity firms and investment bankers from
Allen & Co.
working with Yahoo, one person said.
Armstrong had been interested in a merger with Yahoo last
year and was rebuffed while Bartz was at the
helm, one person
said. Her departure prompted him to reconsider the option, and,
under one scenario
now being considered, Yahoo would acquire AOL
and Armstrong would become CEO
of the combined company, the
person said.
Yahoo is unlikely to be interested in a deal for AOL at
this time given the company’s losses
and declining revenue,
according to one person familiar with the matter.
AOL’s market
value is about $1.6 billion, while Yahoo’s is about $18.2
billion.
Graham James, a spokesman for AOL, and Kim Rubey,
spokeswoman for Yahoo,
declined to comment.
AOL and Yahoo have been struggling to compete against
Internet companies such as Google Inc.
(GOOG) and Facebook Inc. AOL has
lost almost $800 million since it was spun off from
Time Warner
Inc. (TWX) in 2009. The Internet pioneer has struggled to make money
from
online advertising as its profitable dial-up Internet
access business declines.
AOL is also using Allen & Co. to
consider its strategic options.
Subscribe to:
Post Comments (Atom)