Bloomberg: AOL-Yahoo Merger Discussed

AOL YahooAOL chief executive Tim Armstrong and advisers for Yahoo are discussing combining the two companies in the wake of Carol Bartz’s ouster as Yahoo CEO, Bloomberg reports. Armstrong perhaps sees his opening now that Bartz has been forced out — he was interested in a merger last year but was rebuffed. Armstrong has consulted private-equity firms and investment bankers from Allen & Co, working with Yahoo. Yahoo has been considering all its options, including acquisitions — it is believed to be a bidder for Hulu — and splitting itself into parts. One option appears to be Yahoo acquiring AOL, with Armstrong taking the reins as CEO of the combined company, according to one source. Meanwhile, Bartz has said she plans to remain on the Yahoo board, and though she thinks new interim CEO Tim Morse is “a great guy,” she feels she is the only true replacement for herself.

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