AOL planning to buy Yahoo?

In recent months, Yahoo has become the garage sale of the Internet, where many curious tech company shoppers are looking at taking property from Yahoo, and among these curious shoppers is AOL. However, AOL isn't alone, there are several private-equity firms looking at purchasing all of or some of Yahoo.

According to people familiar with the situation, via The Wall Street Journal, AOL is among the top firms interested in buying Yahoo, but why?

Both AOL and Yahoo are on a slippery slope, and slowly descending into oblivion. So why would merging two aging companies some how bring it back to life? Advertising. AOL and Yahoo are facing fierce competition from Google and Facebook, who seem to be the dominant giants in advertising, but merging the two companies might actually serve some purpose, bringing two failing advertising companies and making one decent contender.

There is also rumours of a reverse merge, where Yahoo has invested interested in AOL, after Yahoo disposes of the Alibaba stake.

Talks about the possible take-over of Yahoo are still in the preliminary stages and may never take flight. Talks could take months, even years before a clear-cut decision is made, but this is how Microsoft came to make a search deal with Yahoo last year.

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