Time Warner's Limping AOL internet business and besieged Yahoo! are about to enter talks about a possible mega merger of two of the most celebrated internet brands.
FT is reporting that "According to one person familiar with the company's thinking, the Yahoo board approved a new round of discussions with AOL, though active deal negotiations are not underway at this stage."
This came after Carl Icahn, Frank Biondi and Frank Chapple were given seats on the Yahoo! board, which is widely seen as the forerunner to another round of merger talks.
Yahoo! is picking up the pieces after Microsoft's USD 44.6 billion bid for the ailing internet mammoth failed, leaving the share prices at its lowest point for nearly five years, closing yesterday at USD 18.93, near its 52-week low of USD 18.67.
The merger between AOL and Yahoo could be worth around USD 10 billion and could be hasten by the deteriorating global economic conditions.
Last month, AOL saw slumping online ad revenues which fell by 16 percent to USD 1.1 billion and was further compounded by a 30 percent dip in subscription revenues after its ISP operations were slashed.
AOL sold its UK broadband segment to Carphone Warehouse in October 2006 for GBP 370 million.