Is it possible that Yahoo would merge with AOL to keep Microsoft out of the picture? While this may sound like a silly idea for a company the size of Yahoo, it has been a topic of great discussion this past week. When it comes down to it, Yahoo needs to make some sort of move before Microsoft decides to step things up in an attempt to take over the company via a proxy battle.

This is an interesting rumor to keep an eye on for several reasons. First and foremost, AOL offers a lot of content through a number of services. This would fit in well with Yahoo’s goal of increasing their performance in the online advertising world. While Google is the king of this world right now, a Yahoo-AOL merger could definitely mean bad news for the company.

Moving on, many industry insiders feel that Google would actually encourage this deal. The reason for this is quite simple: they perceive Microsoft as an up and coming threat, and by keeping them away from Yahoo they will have a much more difficult time making up ground.

If all of this is not interesting enough, Google already owns a five percent stake in AOL. They purchased this share of the company in 2005 for $1 billion. Although Google only owns a small piece of the company, it would be interesting to see how this is handled should a Yahoo and AOL merger take place.

Although nothing has been confirmed, there are many who feel that this deal is just a matter of time. With that being said, some experts think that this will send both Yahoo and AOL down the tubes even faster. Alone, both companies are having a difficult time keeping up with the competition. Would a merger of two sliding companies result in a quicker downfall? This question is impossible to answer, but if this deal goes through it is safe to say that there will be plenty to talk about in the months to come.

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