AOL hires financial advisers to explore strategic options

Media company AOL Inc is exploring options, including a possible tie-up with internet giant Yahoo and has hired financial advisers to help in the process, says a media report.

Attributing to people familiar with the matter, The Wall Street Journal reported that AOL has hired financial advisers to explore various strategic options for the company, one of which includes a possible tie-up with Yahoo.

AOL, which has previously held merger talks with Yahoo, has not approached to Yahoo with a formal proposal, the report said, adding that AOL's advisers have been presenting different scenarios and ideas about a potential deal to the company's officials.

The options include merging Yahoo's and AOL's online businesses, after spinning off the internet firm's Asian assets that would return capital to shareholders.

Another option is to have private equity acquire a stake in the combined operations, a plan to pay a dividend to Yahoo shareholders, the report added.

Yahoo-AOL merger could create a strong competitor in the market for online display ads, which include video, banner and interactive ads. That market is expected to total roughly $20 billion world-wide this year and may grow to $50 billion over the next few years, as more video content moves online, the report said citing analyst.

AOL has been proactive in deal making in recent months. In September, AOL acquired 5min Ltd, an Internet software and content provider, from Globespan Capital Partners and other parties. In that same month, AOL also acquired TechCrunch, a technology and venture capital blog.