AOL and Yahoo! to join forces? The Gossip Goes On

Rumours of a merge between Yahoo and AOL have flooded the internet recently and these suggestions are continually being fuelled. The talk is that AOL are planning to split their company into a dial up business and content/advertising business, with one part being sold and the other being merged with Yahoo.

Mashable reports that the dial up half of the company will be sold to another internet provider such as Earthlink, with the advertising half joining forces with Yahoo. However CTV News has reported that Earthlink were willing to buy the dial up business but instead agreed to buy DeltaCom Inc. for $516-million. In doing so the company tied up a majority of its free cash and is unlikely to look for another big transaction for now.

Naturally the deal would be dependant on a mutual interest from Yahoo and interest from potential buyers of the dial up business. This may be a problem as dial up internet is effectively dead due to the introduction and success of broadband; however AOL were very successful with this in the 90s and still generate revenue from it because of their loyal users. It was reported that AOL were planning to acquire Yahoo outright with the help of several venture capital firms that would have financed the deal.

These claims never came true and are unlikely due to AOL being a smaller company than Yahoo, with it being said that they are 8 times the size. It is far more likely that Yahoo will be the ones who acquire AOL although it is not clear if there is an interest and neither company has commented. Time will tell and we will eventually see if this big deal takes place. Leave us your thoughts and comments on this story below.