Will Tim Armstrong’s Ego Drive Him to Yahoo?

With the ouster of beleaguered Yahoo Inc’s (NASDAQ:YHOO) CEO Carol Bartz, AOL Inc. (NYSE:AOL) is again considering its interest to merge with Yahoo, the Bloomberg reported. Bloomberg further reports that AOL CEO Tim Armstrong approached private equity firms and investment bankers from Allen & Co. about a possible merger. Of course, Tim Armstrong sees himself at the helm of the merged entity.

However, it’s still unclear how much Yahoo (NASDAQ:YHOO) will be positive about the merger, given that Yahoo rebuffed AOL’s merger offer last year when Carol Bartz was the CEO. Moreover, with decreasing revenue and existing losses, Yahoo Inc’s board is likely to be more concerned about reinvigorating the business and finding a permanent CEO for the company (CFO Timothy Morse is only an interim CEO).

As the Wall Street drama unfolds, keep your eyes on the following media/internet stocks: Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), IAC/InterActiveCorp. (NASDAQ:IACI), News Corp (NASDAQ:NWSA), Demand Media (NYSE:DMD), and CBS (NYSE:CBS).