Here’s what Fortune has to say about the benefits of Yahoo buying AOL…
Swallowing AOL won’t transform Yahoo, but would give it increased traffic and a shot in the arm for its search-advertising business. The real question is whether Time Warner wants to sell. “Time Warner has a new strategy for AOL and is not contemplating any deals,” says a company spokesman. Citigroup analyst Jason Bazinet estimates AOL is worth about $13 billion. Of course, Time Warner might demand more.
While Yahoo might be tempted to make a quick acquisition of AOL, in an effort to catch-up with Google, it should take some time to consider its options. There’s no point doing an acquisition, just because you can. While things are not exactly rosey at Yahoo, they have a number of seeds planted – the biggest of which is the new Panama interface and algo – so I wouldn’t be too tempted to make a snap-decision now. That being said, if they can get a great deal on AOL, it would certainly be a warning shot across Google’s bow.