AOL and Yahoo! in due diligence for tie-up

AOL Time Warner and Yahoo! are understood to be in due diligence, a process which companies undertake when in potential acquisition negotiations. The ongoing discussions are believed to be looking at how to merge the two internet businesses.

Talks were held between Yahoo! and AOL late last year, but had since broken down. Yahoo!’s new board has now agreed to re-consider AOL’s offer.

The current talks are focused on integrating AOL’s content and advertising business into Yahoo!’s operations, in which Time Warner would have a stake. They follow the failed £29bn takeover bid from Microsoft earlier this year.

The news comes as speculation mounts over the possible axing of the Google-Yahoo! advertising deal in the US, due to delayed judicial inquiries.

Yahoo! recently reported a pre-tax profit fall outside of the US of 7% to $119m (£72.8m) in the three months to September 30. The internet giant said that as a result of the fall, it will cut around 10% of its global workforce.

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