AOL Exploring The Option Of Splitting The Company and Merging With Yahoo!

Posted Dec 6, 2010

AOL is considering the option to splitting the company into different parts and merging with Yahoo! These talks are in early stages and AOL has not formally made a proposal to Yahoo! yet.

This option is similar to when AOL had split from Time Warner. Before AOL split from Time Warner, they had separated their dial-up Internet service from their display advertising and content business. Back then Time Warner had considered merging AOL with Yahoo! until the company decided to have them file public again as a separate company.

Yahoo! is expected to make about $1.64 billion in EBITDA this year. Yahoo! claimed that they are not seeking any buyout or proposal discussions with AOL. A big chunk of AOL’s revenues are from their dial-up business which is expected to make $1 billion of revenue this year out of the company’s $2.4 billion. AOL has about 4 million dial-up customers and it is dropping by about 200,000-300,000 per month.