Is an AOL-Yahoo! Merger in the Works?
A new report is saying AOL CEO Tim Armstrong is pushing hard for a merger between his company and Yahoo!
(IBTimes) -- 09/09/2011 --

Following the dismissal of former chief Carol Bartz, major changes could be in the works at Yahoo! Inc. including a merger with a rival according to a new report

The report from Bloomberg says AOL Inc. chief executive officer Tim Armstrong is in discussions with Yahoo advisers to gauge interest in a possible between the two companies. The unnamed source told Bloomberg that Armstrong has talked with private equity firms and investment bankers from Allen & Co. who are working with Yahoo.

Under Armstrong's scenario, the two companies would combine into one and Armstrong would be the chief executive officer.  Both companies are in the same business, producing original content and making its revenue primarily off of advertising. However, Yahoo is more valuable than AOL, with a market value of $18.2 billion compared to AOL's $1.6 billion.

The possible merger between the two companies had been discussed last year. However, Bartz was not interested and rebuffed Armstrong.

Bartz was recently ousted from Yahoo in a dramatic, controversial fashion. Bartz sent an email to her employees seemingly moments after her firing and wrote, "I am very sad to tell you that I've just been fired over the phone by Yahoo's chairman of the board. It has been my pleasure to work with all of you and I wish you only the best going forward."

The method of her ouster was tactless to many, especially considering she is a woman. Bartz, never shy with words, told Fortune that Yahoo had f-cked her.

Both companies have experienced a fall from grace. In the 1990s, they were two of the biggest, most profitable tech companies in the world. However, the rise of Google and Facebook has shoved them into the background.

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