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AOL, Inc. (NYSE:AOL) a Prime Acquisition Target for Yahoo! Inc. (NASDAQ:YHOO)

Boston, MA 09/29/2014 (wallstreetpr) – AOL, Inc. (NYSE:AOL) is slowly turning out to be a prime acquisition target for Yahoo! Inc. (NASDAQ:YHOO).  The global Web service company has reinvented itself; growing to become one of the major players in the lucrative digital advertising industry. Yahoo, according to Bloomberg could look to tap into AOL as one of the ways of competing against Google Inc. (NASDAQ:GOOG) and Facebook Inc. (NASDAQ:FB) on Digital advertising.

Yahoo’s Takeover talks

Chief Executive Officer, Tim Armstrong, has worked tirelessly to transform the company especially after a failed marriage with Time Warner Cable Inc. (NYSE:TWC) that resulted in a spinoff. Investments in various fields involving ad technology has allowed the company strategically position itself as a possible profit reaping company in the near future.

The future looks brighter for AOL, Inc. (NYSE:AOL) especially after news emerged that an activist shareholder was pushing the company to accept a possible merger with Yahoo! Inc. (NASDAQ:YHOO). The merger could happen especially after Yahoo took part in Alibaba Group Holding Ltd (NYSE:BABA)’s IPO that resulted in it bolstering its cash balance. Yahoo has also been struggling on its search engine business and would certainly jump into an opportunity that would diversify its operations and provide another revenue source.

Acquisitions Driving Growth

AOL Inc. (NYSE:AOL)’s path to recovery after the botched marriage has had its ups and down seen by thousands of jobs being slashed as one of the cost-cutting measures. The company was also forced to sell one of its patent in a bid of raising $1.06 billion; cash that was needed to cater a transition from Time Warner. AOL is slowly completing its transition from Time Warner seen by its stock surging by 78% since being spun off in 2009.

Acquisitions have played a key role in transitioning the company and positioning it to profitability. Advertising has remained a key play for AOL especially after acquiring Adap.tv Inc. for $418 million; a platform that matches advertisers and publishers. This year alone, AOL has acquired Convertro Inc. for $82.4 million as well as Gravity for $82.4 million as it continues to push for market-share in the advertising platform.

A merger between Yahoo! Inc. (NASDAQ:YHOO) and AOL, Inc. (NYSE:AOL) would go a long way in fighting for market share in the very competitive advertising segment leading to revenue growth opportunities.

Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email ([email protected]) or his Google+ page (https://plus.google.com/103338576216002376250).



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