Yet another rumor of AOL split, Yahoo merger

Two rumors we've heard many times before, just usually not at the same time: AOL and Yahoo are heading toward a merger, and AOL is looking to shed dial-up access.

In the entertainment press, reporters love to speculate over whether Brad and Angelina will finally get hitched. In the tech world, it's the decidedly unsexier AOL and Yahoo.

There's been a long parade of rumors suggesting that AOL may be looking to either ditch its not-dead-yet dial-up access business or merge with fellow attempting-a-turnaround tech conglomerate Yahoo; now, a report today from Reuters suggests it's attempting to do both. According to Reuters, AOL is exploring a "complicated series of transactions" in which it would sell off its access business to a prospective buyer and then merge its advertising and content arms with Yahoo.

The rumor is already being discounted by some in the tech press; AllThingsD's Kara Swisher tweeted that the Reuters report was a "figment of bankers' imagination." Indeed, both a breakup and a Yahoo merger have been speculated about for so long that the likelihood of both happening seems particularly out in left field.

Over two years ago, a report surfaced that EarthLink was interested in purchasing AOL's access business as part of an aggregation of formerly powerful dial-up providers. Access is still a big revenue generator for AOL, but it continues to wane, and CEO Tim Armstrong has touted AOL's future as a media company rather than an ISP since assuming the office in early 2009. Less than a year into Armstrong's tenure, AOL was spun off from parent company Time Warner , marking a final death to the disastrous merger of the two in 2001.

As for the Yahoo rumors, Reuters suggested today that Yahoo "could support AOL's display ad business, giving AOL the confidence to shed the dial up division." Yahoo itself has been struggling to regain lost ground, and talk of an AOL merger has been going on for nearly three years now --dating back to speculation of an AOL deal as an alternative to the ultimately failed acquisition of Yahoo by Microsoft --with nothing more concrete.

About the author

Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos.

 

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