WSJ:
http://online.wsj.com/article/SB10001424052748703673604575550661101743360.html?

<< AOL Inc. and several private-equity firms are exploring making an offer to buy Yahoo Inc., according to people familiar with the matter, devising a bold plan to marry two big Internet brands facing steep challenges.

Silver Lake Partners and Blackstone Group LP are among the firms that have expressed interest in teaming up with AOL to buy Yahoo or trying to take it private on their own, these people said.
.... >>

Yahoo Is Down :P

http://techcrunch.com/2010/10/14/yahoo-is-down-as-if-carol-bartz-needed-more-problems/

If you go back to 2002, Yahoo offered to buy Google for $3 billion. Google said that wasn't enough; they wanted $5 billion. And Yahoo refused to pay that much. Surely one of the biggest commercial mistakes ever made.
http://www.wired.com/wired/archive/15.02/yahoo.html

Back to the topic at hand, I don't see that AOL can bring anything worthwhile to the table. Yahoo is better off without AOL, and Yahoo seems to have enough cash that it needn't accept the offer in desperation.

> Surely one of the biggest commercial
> mistakes ever made.

Or after buying they would have ruined it by giving Google the wrong direction... then $3 would have been overpriced :)
One of the most remarkable things about Google is how they kept direction with focus on good technology, scaling, growing data, long term planning over sell out, and minimalist interfaces. Perhaps in Yahoo's hand, Google would look like this (mock from 2004)...
http://blogoscoped.com/files/evil/1.jpg

I wouldn't have minded* seeing stuff like Google Lively 3D, Google Groups or Google Answers in Yahoo's hand, though. (The latter not needed now we got Uclue.)

*Sorry for perhaps incorrect grammar, I'm lost on that one.

> Sorry for perhaps incorrect grammar

"I wouldn't have minded" is perfect grammar. In my experience, the average German uses better English grammar than the average native English speaker.

Yahoo has done a great job with Flickr, so they've got some of what it takes to succeed.

Yes I know Yahoo acquired Flickr rather than building it in-house, but they've greatly improved the community, the interface and the infrastructure in the 5 years they've had it.