Yahoo's Bartz ouster ignites new AOL merger possibilities

With Carol Bartz now out of Yahoo!'s (Nasdaq: YHOO) picture, AOL's (NYSE: AOL) CEO Tim Armstrong is revisiting his idea to merge the two Internet providers, according to two people with the matter in a Bloomberg article.

One person said that Armstrong has been talking with private equity firms and investment banker from Allen & Co.

Armstrong previously presented the merger idea to Bartz, who dismissed it, but her departure drove Armstrong to reconsider merging with Yahoo!. In one scenario he is considering, Yahoo! would acquire AOL and Armstrong would become the combined company's CEO.

Given the service provider's ongoing financial losses, it's not likely that Yahoo! would want to consider merging with AOL. AOL's market value is about $1.6 billion, while Yahoo's is about $18.2 billion.

Neither company would comment on any potential deal.

For more:
- Bloomberg has this article

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