Rumors are swirling that AOL and Yahoo will merge. “People familiar with the matter” say that AOL CEO Tim Armstrong is talking with Yahoo advisers about the potential for a merger.
“Armstrong is discussing options for a combination aimed at strengthening the two Internet companies,” Bloomberg 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.”
However, CNBC reports later said Yahoo was not interested in a deal, while both parties declined official comment. Colin Gillis, an analyst with BGC Partners thinks the deal would make more sense for AOL than for Yahoo.
“Do they really need a dial-up business Do they need more page views ” he asked. “Do they need to pay $2 billion for a CEO . . . Do they need to hire more sales people The last thing they need is an acquisition like that. They need to focus on their own house.”
Others think the possibility is slim at best given that Yahoo has been seeking to simplify their business. “I do not see a one on one transaction—merger, acquisition or otherwise—with AOL and Yahoo,” said Scott Kessler, an analyst with Standard & Poor’s. “And if it were to happen, I think it would be a mistake.”
Source: adweek.com
