AOL Planning Super Merger With Yahoo?

Two of the biggest names on the internet, AOL and Yahoo, may soon become one entity if AOL succeeds in breaking up the company as planned.

Sources "close to the plans" told Reuters that AOL has yet to make a formal proposal to Yahoo (ed : and chose instead to use a third party like the press to do it for them).

Not surprisingly, the rumour caused both shares of both AOL and Yahoo to rise as the two brands have been struggling over the last few years to compete with the likes of Facebook and Google.

The deal would see AOL spin off its money-making AOL dial-up business which apparently brings in more than $1 billion, around 40 per cent of the company's annual revenue.

Analysts say that Yahoo and AOL are complimentary businesses since they tend to attract a different audience and their strengths lay in different places.

Should the merger go ahead, "Yahol" may become the biggest online property on the web, edging both Google and Facebook; 2011 could be very interesting.