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Report: AOL Continues to Push for Yahoo Deal

Armstrong said to be pitching cost savings to shareholders

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Report: AOL Continues to Push for Yahoo Deal
[ Business]

Last month, we looked at some chatter that was going around that AOL wants to merge with Yahoo, but that Yahoo was not too interested. A Bloomberg piece, citing “people familiar with the matter,” indicated that AOL CEO Tim Armstrong was talking with advisors to Yahoo to gauge interest in combining the companies.

CNBC countered with a “source close to Yahoo” saying that there was “no interest in a deal with AOL.”

Reuters is now reporting that Armstrong has been meeting with top shareholders over the past couple weeks to push the idea of a sale to Yahoo that “could wring up to $1.5 billion in cost saving”, citing “sources with knowledge of the discussions.”

The saving should come from overlapping data centers and duplicate news sites (like sports and finance), based on Reuters’ account of what a “major shareholder who met with Armstrong” said.

The timing of these discussions is very interesting considering that Yahoo is currently without a permanent CEO. There is also talk about other parties being interested in buying Yahoo (including Microsoft).

It’s also interesting considering the acquisitions AOL itself has been making, particularly in the content business – The Huffington Post obviously being the big one.

We still haven’t seen any indication that Yahoo is interested in a deal with AOL, although interestingly enough, Microsoft, Yahoo and AOL all just partnered on an advertising initiative to compete with Google. If there is one thing that could make any of these scenarios play out, it might just be the common goal of taking down Google.

Report: AOL Continues to Push for Yahoo Deal
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