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AOL CEO Tim Armstrong dusts off plans for Yahoo merger after board sacks Bartz

Yahoo and AOL are discussing a merger following the sacking of Yahoo chief executive Carol Bartz. AOL chief executive officer Tim Armstrong is returning to proposals for a merger rebuffed by Bartz last year.

Yahoo and AOL are said to be discussing a merger.

The move comes as Yahoo reshuffles its leadership after the board dismissed chief executive Carol Bartz.

AOL chief executive officer Tim Armstrong is returning to proposals for a merger rebuffed by Bartz last year.

AOL's CEO has held talks with advisers to Yahoo to gauge interest in combining the companies, according to Bloomberg.

Citing anonymous sources, the Bloomberg report said Tim Armstrong is discussing options for a combination aimed at strengthening the two internet companies. AOL and Yahoo have faced declining fortunes in recent years as they struggled to compete against companies such as Google and Facebook for users and advertising revenue.

AOL is valued at $1.68bn, having lost almost $800m since it was spun off from Time Warner in 2009. Yahoo is worth just over $17bn, down from $80bn at its peak.

Under one scenario now being considered, the sources say, Yahoo would acquire AOL and Armstrong would become CEO of the combined company. But analysts say Yahoo is still unlikely to be interested in a deal because of AOL's losses and declining revenue.

However, if a merger were agreed, it would attract regulatory scrutiny in the US as AOL and Yahoo remain big players in the online industry despite their decline, according to the Guardian.

As the merger talks are not official, both companies have declined to comment.

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