AOL CEO Tim Armstrong is talking with advisers to Yahoo! to gauge its interest in combining the companies after the ouster of CEO Carol Bartz, two people familiar with the matter told Bloomberg. Armstrong has talked with private equity firms and investment bankers from Allen & Co working with Yahoo, one person said. Armstrong had been interested in a merger with Yahoo last year and was rebuffed while Bartz was at the helm, a source said. Her departure prompted him to reconsider the option, and, under one scenario now being considered, Yahoo would acquire AOL and Armstrong would become CEO of the combined company. Yahoo is unlikely to be interested in a deal for AOL at this time given the company's losses and declining revenue, the report said. AOL's market value is about USD 1.6 billion, while Yahoo's is about USD 18.2 billion. Both companies declined to comment. AOL is also using Allen & Co to consider its strategic options.
