Rumors Of AOL Acquisition By Yahoo Rubbished By Exec

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Three years ago there were rumors that both companies had hired financial advisors to investigate the companies’ possible pairing. At the time, it was thought that New York-based AOL, Inc. (NYSE:AOL)’s Tim Armstrong would become CEO of the newly combined company and Yahoo! Inc. (NASDAQ:YHOO)’s then CEO Carol Bartz would assume the role of Chairman.

AOL – Yahoo’s deal implications

That clearly never happened and there is really no way to know if it was just idle speculation or something was in the works. Yahoo! Inc. (NASDAQ:YHOO) is has recently struck a deal that will see the company holding on to quite a bit of its stake in Alibaba. That said, they will still be in line to receive a massive after tax gain, certainly enough to pick up AOL if interested as AOL, Inc. (NYSE:AOL) has a market cap of around $4 billion.

However, at the Fortune Brainstorm Tech 2014 conference Tuesday, Yahoo chief development officer Jackie Reses was asked whether AOL would be acquired in the next two years, to which Reses said, “Not by us,” according to Re/code.

Yahoo’s Unsatisfactory earnings

Yahoo! Inc. (NASDAQ:YHOO) also reported its 2Q 2014 earnings yesterday with CEO Marissa Mayer saying she was “not satisfied” with the numbers.

While Yahoo saw some gains in search and other advertising streams, display advertising prices continued their fall in average pricing losing 24%. Display advertising “remains an area of investment and transition,” Mayer said, “further highlighting the fact that we need to work faster to ameliorate the negative trends.”

Overall revenues were reported at $1.1 billion for the quarter which were off 4% year-over-year. Net income fell 19% from the corresponding quarter at $270 million.

Perhaps the biggest news yesterday was that Yahoo had struck a deal with Alibaba that would see it well 140 million shares as opposed to an expected 208 million.

In today’s trading, Yahoo finished the day at $33.79, down $1.82 or 5.11%.

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