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The idea would be to combine their Internet operations, but the effect could be to thwart Microsoft's efforts to take over Yahoo. At the least, the plan could put more leverage on Microsoft, which has adamantly refused to increase its offering price. In addition to joining up with AOL (details still fuzzy), Yahoo would propose repurchasing billions of dollars of its own shares and is negotiating with Google about an advertising partnership of some kind. From the WSJ:
If consummated, the Yahoo-AOL discussions would unite two of the Internet's largest Web sites. One person involved in the discussions cautioned that there was still "a lot of work to do" before a final agreement between AOL and Yahoo. Yet there is also incentive for Time Warner to complete a deal. It has been struggling to find a viable strategy for AOL for years. AOL has lost most of its value since it combined with Time Warner in 2000.
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.