A report in Reuters says AOL may be considering breaking up into separate units and possibly merging with Yahoo as part of a broader effort to regain relevance in a rapidly changing online environment.

The complicated plan, as reported by the news organization, would involve combining Yahoo and AOL's web properties into an online content powerhouse, while splitting off AOL's dialup Internet service provider business.

While relying on unnamed sources for the news, the story quotes financial analysts as praising the idea. AOL has been undergoing a slow transformation under CEO Tim Armstrong, the former Google exec who has already made such moves as selling for a loss the Bebo social network it spent $850 million acquiring two years ago, and acquiring the tech blog TechCrunch earlier this year.

Yahoo is considered stronger in sports and business news, while AOL has the edge on entertainment news and services. AOL recently hired former Yahoo music executive Jeff Bronikowski to lead its music division as VP and head of music.

Questions? Comments? Let us know: @billboardbiz

Print