AOL (AOL) Seeks Merger with Yahoo! (YHOO), Shares Tumble
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Following an initial move higher, AOL, Inc. (NYSE: AOL) shares sold off very sharply on Friday amid reports the company may be looking to do a merger with Yahoo! (Nasdaq: YHOO).
Sources say AOL CEO Tim Armstrong has began talking with Yahoo! advisors following the recent firing of CEO Carol Bartz.
Armstrong has allegedly been talking with advisors and private equity on the deal. Earlier in the day, Yahoo! was rumored to engage UBS and Allen & Co. to assist the company as it moves forward in bringing more value to shareholders.
Most pundits argue Yahoo! would probably not be interested in doing a deal with AOL given its recent company losses and declining revenue. Yahoo! currently sports a market value of $18.2 billion, compared to AOL's $1.6 billion.
Both companies have struggled recently, facing stiff competition from Google (Nasdaq: GOOG) and Facebook. Bloomberg notes AOL has lost about $800 million since spinning off from Time Warner (NYSE: TWX) in 2009. After boasting a market value of $80 billion in early 2008, Yahoo! rejected a $47.5 billion takeover offer from Microsoft (Nasdaq: MSFT) in 2008, and is down to just $18 billion as of Friday.
AOL shares last traded at $14.62, down 6 percent from Thursday's close, while shares of Yahoo! are down 0.6 percent to $14.35.
Sources say AOL CEO Tim Armstrong has began talking with Yahoo! advisors following the recent firing of CEO Carol Bartz.
Armstrong has allegedly been talking with advisors and private equity on the deal. Earlier in the day, Yahoo! was rumored to engage UBS and Allen & Co. to assist the company as it moves forward in bringing more value to shareholders.
Most pundits argue Yahoo! would probably not be interested in doing a deal with AOL given its recent company losses and declining revenue. Yahoo! currently sports a market value of $18.2 billion, compared to AOL's $1.6 billion.
Both companies have struggled recently, facing stiff competition from Google (Nasdaq: GOOG) and Facebook. Bloomberg notes AOL has lost about $800 million since spinning off from Time Warner (NYSE: TWX) in 2009. After boasting a market value of $80 billion in early 2008, Yahoo! rejected a $47.5 billion takeover offer from Microsoft (Nasdaq: MSFT) in 2008, and is down to just $18 billion as of Friday.
AOL shares last traded at $14.62, down 6 percent from Thursday's close, while shares of Yahoo! are down 0.6 percent to $14.35.
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