October 13, 2011
AOL CEO Trying To Sell Company To Yahoo
Reuters reported on Thursday that AOL Inc. CEO Tim Armstrong is talking about selling the company to Yahoo Inc.
According to Reuters, Armstrong is trying to get shareholder support for the deal, which could help the company save between $1 billion to $1.5 billion in expenses from data centers and news sites.The report said the shareholders liked the idea of a merger with Yahoo, but they are unsure if Armstrong will be able to pull it off.
"He's in the sixth inning," Reuters source, a top 20 AOL shareholder, said. "It is not fair to grade him right now but I think the investment community is a little put off. There is a strong desire to see tangible results."
The news agency said Armstrong is pushing the idea that a combination with Yahoo would appease ad agencies looking for more efficient buys with a bigger audience.
AOL shares dropped 31 percent in August when the company reported a quarterly blamed on the loss of advertising growth.
"As far as Armstrong's desire for an exit, he doesn't want to be doing what he is doing 18 months from now. He wants to be out," a source familiar with Armstrong's thinking told Reuters. "He's an ambitious sort of guy and AOL is such an afterthought. But he would definitely put his hat in the ring to run a combined Yahoo/AOL."
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