Rumour has it: Yahoo and AOL might be merging

Yahoo Head LogoVarious sources have confirmed that Yahoo’s Marissa Mayer has been seen hanging out with Tim Armstrong of AOL. Could a possible merger between the two be on the horizon?

According to many, the two were seen spending hours in the late night at a resort bar, talking animatedly. There is a chance they were doing nothing more than getting a few drinks and letting off steam, perhaps keeping up on their connections like all good execs.

But there are a few reasons that this could be a much bigger deal. For one thing, there have been rumors of a possible merger for a while. People in both companies think it is a decent enough idea, and Armstrong has hinted several times that he thinks a combination could be beneficial.

Then there is the current struggle Yahoo is having with its ad revenue. Mayer is notorious for being good at numerous elements of running the company, but being bad on an epic scale when it comes to building ad revenue.

Tumblr, which has been running ads for a year, has not made a single cent in profit. Yahoo itself, still a valid name on the internet and a strong brand, is pretty much stalled and facing a down turn.

She has also missed meetings, phone calls, and had to fire COO Henrique De Castro, who was responsible for fostering relationships with important ad execs. More or less, because he didn’t do his job any better than she did.

A merger between the two companies would make sense. Yahoo is relevant in today’s digital world, while AOL is not. However, AOL has a strong ad revenue, and knows how to bring in profits, while Yahoo does not.

Both are also classic and recognized brands. Together, they could potentially form something exciting. Or maybe just end up looking like the online equivalent of two old people sitting on a bench, remember the good old days of the dial up signal.

All of this is just speculation, for the moment. No one knows what is going on, if anything. But if there is any industry just as gossip obsessed as Hollywood, it is the technology world.

Source: Re/code

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