AOL, Yahoo merger rumors seem like flashback to 1990s

Summary:Rumor has it that AOL is in talks with Yahoo over a merger deal, which just reads like a couple of has-beens getting together because there's else nothing left to do.

In the last week, two of the biggest pieces of tech news were about AOL and Yahoo. First, AOL is in a mess with TechCrunch over letting go founder and former editor-in-chief Michael Arrington. Then Yahoo popped up on the radar after firing CEO Carol Bartz, which has turned into a bitter battle of words.

Now, Bloomberg is reporting that AOL CEO Tim Armstrong is talking with advisers to Yahoo about possibly merging the two companies now that Bartz is out after she "rebuffed" merger offers last year.

Seriously, what is this? A flashback to the late 1990s? How are these two companies even relevant anymore? To be slightly fair to Yahoo, its search engine traffic is climbing -- albeit slowly. But Yahoo has had mismanagement and up-and-down quarterly results for years now.

As for AOL, it's hard to see why anyone would want to join up with them now. Not only is its market value far lower than Yahoo's at $1.6 billion versus $18.2 billion, but the recent debacle with Arrington is not shedding a good light on the company (it hasn't seen a good light in years) but analysts predict that the whole situation could be extremely damaging to the company overall. Even Time Warner lost interest in AOL and eventually spun the company off into its own entity in 2009.

These two companies were giants over a decade ago, but it's hard to see why they would want each other at this point. Perhaps it's because no one else is interested at this point. But two flailing companies does not necessarily make another profitable one.

However, CNBC is reporting on its Twitter feed that a source close to Yahoo said that Yahoo has no interest in a deal with AOL. Even Yahoo is too good for AOL -- and that's not saying much.

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Topics: Banking, Social Enterprise

About

Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider, FastCompany.com, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for MainStreet.com, Irish Americ... Full Bio

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