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AOL considers breakup, deal with Yahoo - report.

Summary: NEW YORK: The internet company AOL Inc. is considering breaking itself up and then combining its content division with Yahoo Inc., a published report said Monday.The news agency Reuters said Monday that AOL's plans are in the exploratory stage and that it has not approached Yahoo. Reuters cites unidentified people close to the plans

NEW YORK: The internet company AOL Inc. is considering breaking itself up and then combining its content division with Yahoo Inc., a published report said Monday.

The news agency Reuters said Monday that AOL's plans are in the exploratory stage and that it has not approached Yahoo. Reuters cites unidentified people close to the plans.

Under the transaction reportedly being considered, AOL would sell its dial-up business to another internet service provider and combine its content business with Yahoo, which publishes news and a widely used network of maps.

New York-based AOL and Yahoo, based in Sunnyvale, California, each declined comment on the report.

Time Warner Inc. bought AOL, then a ubiquitous internet service provider, in 2000 for $162 billion, only to spin it off in 2009. As of Monday, AOL's market cap was $2.69 billion.

AOL earned $171.6 million, or $1.60 per share, in the third quarter, more than doubling its profit after selling its instant messaging business ICQ and its stake in the travel site Kayak.com.

However, its revenue fell nearly 36 percent to $563.5 million. Its dial-up business in particular, which had 26.7 million subscribers at its peak, lost 24 percent of its subscribers, reducing the total to just 4.1 million. Revenue for that division fell 26 percent in the third quarter.

Meanwhile, online advertising revenue fell 27 percent.

With these losses as a backdrop, AOL is attempting to re-invent itself. Earlier this year, under CEO Tim Armstrong, a former Google executive, the company sold the social network Bebo as well as AOL's digital marketing unit, uSamp.

During the third quarter, AOL introduced its new advertising system and launched redesigned versions of its home page, as well as AOL Travel and MapQuest. And in September, the company bought the technology blog TechCrunch and its sister sites for an undisclosed sum, bolstering a stable of content that already included the popular technology blog Engadget.com. -- AP

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Publication:The Daily Star (Beirut, Lebanon)
Geographic Code:1U2NY
Date:Dec 7, 2010
Words:397
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