According to a reliable source, the CEO of AOL Inc. Tim Armstrong is in talks with top shareholders over the past couple of weeks to work out an idea for a merger with Yahoo Inc. This is a perfect idea that can help squeeze up to $1.5 billion of cost savings, sources said.
Armstrong is putting every effort to convince the shareholder to support this deal with Yahoo! by pointing out that this could be an alternative to operating as only an Internet media company.
One of the top 20 AOL shareholders attending the meetings said that, “The focus in the meeting has gone from a year ago of being around the fundamentals to now being how could you carve this up, what are separate assets worth, are there ways to sell off the business to extract value from them," Reuters reported.
According to another shareholder, Armstrong mentioned that a merger between these two can possibly wring out $1 billion to $1.5 billion in the savings from various overlapping data centers and news sites that are duplicates like sports, entertainment, and finance.
The two shareholders said that they like the idea of the merger but, it has to be seen how Armstrong pulls off the deal.