AOL CEO wants to buy Yahoo!

Tina Nguyen Contributor
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Bloomberg reports that Tim Armstrong, chief executive officer at AOL, is pursuing a possible merger between his company and Yahoo!.

Armstrong attempted a merger with Yahoo! last year, but was rebuffed by the web portal’s previous CEO, Carol Bartz. (ALSO IN TECH: Google consumes enough energy to power Arlington for a year)

Sources familiar with the situation told Bloomberg that with Bartz’s recent ouster, Armstrong has renewed talks with private equity firms and investment banks working with Yahoo! about a merger of the two web companies, with Armstrong possibly acting as CEO of the combined companies.

The potential merger would combine two of the largest web portals on the Internet, though they would still trail far behind Web titans such as Facebook and Google.

AOL has been struggling to return to profitability for years, and was notably blamed for dragging down Time Warner after a disastrous $350 billion merger that remains the largest in history. The media company dropped AOL in 2009, and the formerly innovative giant has lost a further $900 million since.

Armstrong has recently been in the news for AOL’s erratic response to the controversy surrounding TechCrunch — a prominent AOL property — and its founder and editor-in-chief, Mike Arrington.

AOL had backed a venture capital fund run by Arrington, a former venture capitalist himself, but could not handle the ensuing scrutiny surrounding the ethics of Arrington running a tech review site as well as an investment fund backing the companies his blog would review.