Wall Street's AOL- and Yahoo-related speculation has resurfaced… and this time it's Merrill Lynch saying online portals AOL and Yahoo may be going into play, and big-time traditional media would likely be among the potential suitors.
"We believe there are several trends that could push either AOL or Yahoo towards a major transaction, with each other or with another competitor," writes the equity research team at Merrill Lynch, reports MediaPost's Joe Mandese.
AOL's loss of online-search share and Yahoo's inability to seriously challenge Google could result in AOL's or Yahoo's exploring a "transformative transaction" within a year or two, according to Merrill, which sees an AOL-Yahoo merger as the most logical outcome.
The next-most logical possibility would be an acquisition by Microsoft, and a third option would be traditional-media scenario, similar to News Corp.'s acquisition of MySpace.
