The Times is reporting that Yahoo is attempting to restart merger talks with America Online (AOL) as possible way to avoid a potential hostile take over from Microsoft. It is possible this is one of the alternatives that came from the Yahoo board meeting on Friday, where the board has apparently decided to decline the Microsoft bid. I would expect this is not the only possibility that Yahoo is courting though.
Yahoo and AOL held merger talks in the past but were unable to come to an agreement. It is believed the current situation between Yahoo and Microsoft, the impending financial downturn in the US, and Time Warner’s desire to separate AOL from their core content business could make this second round of talks a more desirable and productive conversation.