I just don’t see this AOL-Yahoo merger happening. It may make sense from several perspectives which all stem from the fact they are both in essentially the same businesses. However, in the end this merger would not benefit either company. In fact, I believe it would hurt them. Most significantly, I believe the merger would slow down the progress AOL has been making in the recent months.
While AOL-Yahoo will be busy restructuring (yet again), firing people, and integrating with one another, everyone else in the space will be progressing. Meanwhile, AOL-Yahoo will not be, they would essentially be in a stand-still for a while. Neither of them can afford to be in that situation.