Merging AOL and Yahoo: A Disaster or a Chance to Recover?

Merging AOL and Yahoo

Merging AOL and Yahoo

Tim Armstrong-AOL Chief executive-have reportedly reached Yahoo sharing his interest in the merging of the companies. Reports say that Armstrong’s merger plans had also been placed before Carol Bartz, former CEO of Yahoo Inc., who rejected the offer. Reconsidering the option after Bartz departure, Armstrong has reportedly talked to the private equity firms and Investment bankers from Allen & Co. working with Yahoo.

The deal would bring the former Internet and technology leaders together raising hopes for rebuilding standards that they lost years back. Both companies have struggled in the past few years and fallen far from the top positions that they once held.

Tim Armstrong desires to be a CEO of the combined company after Yahoo and AOL merging. But will the collaboration be fruitful? Looking at the financial backgrounds of both the internet-oriented service providers, Chris Versace, an analyst with Think 20/20, said that it is most likely to yield a synergistic math equation of 1+1=1.5.

AOL’s market value is about $1.6 billion, while Yahoo’s is about $18.2 billion. Both companies-AOL and Yahoo-tried to compete with the global Internet market leaders such as Google and Facebook and have failed to keep up with the Internet trends.

Few minutes later when the news hit Bloomberg, CNBC tweeted ON twitter that according to the sources at Yahoo, Yahoo is not interested in the deal. This could be a negotiating trick from Yahoo; or probably, at this point of time, Yahoo doesn’t want to show its involvement in the public. The fact is, both AOL and Yahoo are struggling to reduce losses and retain their market value, if not boom it. This could be a chance to file a brand bankruptcy and start over.

Is the merging enough for both companies to recover? Some analysts said that the merger could not provide a long-term solution to the problems. After all, it’s the companies’ decision. We will follow the story!

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