AOL Must Combine With Yahoo Or MSN

AOL will spinoff from Time Warner, but it won’t survive on its own, Business Insider chief Henry Blodget told Bloomberg TV earlier this week. Henry said AOL, which laid-off about 100 people yesterday, will have to join with either MSN or Yahoo.

Yahoo and AOL spent two days talking integration in late 2008. The deal fell through after AOL’s top executives “got pissed off” as Yahoo chairman Roy Bostock and then-CEO Jerry Yang wavered on whether to pull the trigger. Bostock at first figured he’d complete the AOL deal anyway, but eventually decided not to saddle a new CEO with a deal not of his or her doing.

One exec familar with the talks said the meetings ended with plans to merge the best niche sites from each company, keeping two brands when necessary, but with deep cuts to staffing — mostly on the AOL side.

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