AOL/Yahoo merger: Remedy worse than the disease?

rate in high-profile positions has been extensively documented in recent months.

AOL would be unlikely to solve the big problems that are dragging down Yahoo, including Google's massive domination of search advertising and Yahoo's need to become more nimble in its technology development and innovation.

"Buying AOL doesn't necessarily help Yahoo very much in terms of fixing any real problems Yahoo is having," Enderle said.

What a fusion would do is bring together two struggling Internet companies that have common goals, Enderle said. "AOL would be much better off as part of Yahoo than as part of Time Warner because in theory AOL is worth more to Yahoo than to Time Warner," he said.

The acquisition would also eliminate a competitor and prevent Google or Microsoft from strengthening their menus of products by buying AOL, which Time Warner is openly seeking to get rid of, Enderle said.

On the regulatory front, since AOL and Yahoo are major players in display advertising, such as banner ads, it's not inconceivable that the U.S. government might take a slow, close look at possible antitrust issues involved in a combination of the companies. "That's a likely possibility," Frank said.

Neither AOL nor Yahoo responded to requests for comment.