MUMBAI: Internet service provider AOL Inc is considering making an offer to buy out search engine Yahoo! Inc.

According to reports, the plan would put the two struggling internet players in a better position to compete with Google Inc. 
 
AOL has been holding discussions with private equity firms about organising a buyout but hasn’t held talks with Yahoo. It is also said that Yahoo had hired investment bank Goldman Sachs to help it defend against the possible approaches.

It may be noted that Microsoft had given an offer of $ 47.5 billion in 2008 and currently any deal would most likely value Yahoo at around $25 billion that would be far below the Microsoft offer. Microsoft finally withdrew its last offer of $33 per share in May the same year.
 
The company is discussing the possible Yahoo offer with several firms that specialise in buying companies the stocks of which have fallen out of favour. To take the tide in its favour, AOL would need to bring in more financial muscle to get a deal done.
AOL is run by Tim Armstrong, a former Google executive who is trying to feature more unique content on AOL in an effort to bring in more advertising revenue.