AOL and Yahoo talking about potential merger: report

AOL Inc.'s CEO Tim Armstrong is discussing a possible deal with Yahoo Inc.'s advisers about potentially merging the two companies, Bloomberg News reports.

The talks come on the heels of Yahoo Chief Executive Carol Bartz's ouster, although Armstrong has been interested in a merger with Yahoo since last year, reports Technology Live.

They are looking into ways that both tech companies could benefit from one another. One option being discussed would involve Yahoo acquiring AOL, with Armstrong taking the lead of the combined company, reports the Los Angeles Times.

According to Bloomberg however, Yahoo is unlikely to be interested in the deal with AOL, a company that would come with heavy losses and declining revenues. Currently, Yahoo's market value, $18.2 billion, is 11 times that of AOL's, which is valued at $1.6 billion, reports the LA Times. Aol has lost nearly $800 million since 2009 when it broke off from AOL Time Warner.

Yahoo reportedly declined an $47.5 billion offer from Microsoft Corporation in 2008.

Both Yahoo and AOL have been struggling as the Internet has been evolving as competition from newer companies such as Google and Facebook has emerged.