Yahoo-AOL merger likely by month end

While Yahoo was unwilling to do business with Microsoft, it looks like the company isn't entirely against the idea of a merger with a larger corporate overload: Time Warner, for example.

According to news over on TechCrunch, Yahoo is currently in the latter stages of negotiations with Time Warner over a possible merger – read acquisition of ailing content provider AOL – that could take place as soon as the end of this month. While this isn't the first time the two companies have discussed the possibility of joining forces, it's certainly the first time an almost-firm completion date has been uttered by either party.

The deal on the table is that Yahoo would acquire AOL from parent company Time Warner and take over the content, advertising, and miscellaneous service divisions while leaving the ISP side of things in situ. In turn, Time Warner would give Yahoo around $2 billion for a one-third stake in the newly combined organisation, leaving Yahoo as the majority shareholder.

Currently AOL generates around $2.4 billion annually, but it's thought that the advertising know-how that Yahoo would bring to the table could bump that figure up significantly – something that Time Warner will be banking on in order to recoup its outlay. The combined entity would, according to figures from Comscore, account for approximately 48 percent of all web-based email accounts world-wide – beating Microsoft's 42 percent into second place – and take care of around 39 percent of all worldwide instant messaging needs.

Do you think Yahoo has what it takes to turn AOL into a thriving business once more, or is Time Warner just looking to offload a struggling concern so it no longer needs to worry? Is Microsoft likely to want to purchase the entire joint entity outright once the merger goes through? Share your thoughts over in the forums.