AOL Reportedly Considering Break Up to Attract Yahoo Merger

Chris CrumSearch

Share this Post

AOL and Yahoo both have new focuses on churning out content. This is one reason why some industry analysts have suggested that the two companies would be a good fit for a merger. It's made for interesting conversation, but there has never been any substantial evidence that the two companies would ever pursue such an endeavor. 

There's an interesting report out from Reuters this morning, which says AOL is "actively exploring a breakup involving a complicated series of transactions that may lead to a merger with Yahoo," according to sources that "declined to be named because they were not authorized to speak to the media."

The piece from Reuters reporter Nadia Damouni says that such plans are in an "exploratory stage and that Yahoo hasn't been contacted. It also says that AOL has been exploring a break up since its spin-off from Time Warner in 2009.  "You can drive the pieces into people's hands that could pay top dollar for them and create value, or spin them off," the piece quotes one of the unnamed source as saying. 

The "pieces" being referred to would be AOL's dial-up business, as Yahoo would have no use for it, unlike AOL's advertising and content businesses. 

Dan Frommer at Silicon Alley Insider notes that reports last month suggested AOL CEO Tim Armstrong had talked to Yahoo CEO Carol Bartz.

As with any rumors coming from unnamed sources, you'll obviously have to take this with a grain of salt until further developments arise. In fact, industry insider Kara Swisher tweets:

Aol breaking up to make up w/yahoo, per Reuters? Still a figment of bankers' imagination. My sources at yahoo/aol said nothing new up.less than a minute ago via TweetDeck

Last month AOL reported $563.5 million in total revenue for the third-quarter, higher than expectations. The company reported  $171.6 million in profit - a 132 percent year-over-year increase. In October the company sold four office buildings and land for $144.5 million. 

Chris Crum

Chris Crum has been a part of the WebProNews team and the iEntry Network of B2B Publications since 2003. Follow Chris on Twitter, on StumbleUpon, on Pinterest and/or on Google: +Chris Crum.