updated 07:40 pm EDT, Wed October 12, 2011
AOL CEO pitches $1.5B in cost reductions
AOL's CEO Tim Armstrong has been meeting with top Yahoo shareholders in an effort to convince them that a merger between the two companies is in the best interest of shareholders, tipsters claimed Wednesday. The Reuters source said Armstrong believed that if his company were to be sold to Yahoo, up to $1.5 billion in costs could be saved by the combined company. It came despite Yahoo's focus on putting itself up for sale.
Yahoo shareholders who purportedly attended the meetings said that Armstrong believes that the savings would come from eliminating overlapping data centers and duplicate news sites, including the companies' sports, entertainment and finance operations. The AOL CEO also argued that a combined AOL/Yahoo, with a bigger audience, would be more attractive to ad agencies with looking for more efficient use of their money.
Rumors had surfaced in early September that Yahoo and AOL were mutually interested Yahoo acquiring AOL. The interest waned however after Yahoo conducted a strategic review of its options, which led to its decision to see if it could find a buyer.
Despite this lack of continued interest by Yahoo, Armstrong has reportedly continued trying to convince Yahoo shareholders that they should reexamine acquiring his company.
None of the involved companies have confirmed any details.