Struggling Internet firms AOL and Yahoo are reportedly in talks to gauge the possibility of merger of the two businesses.

According to a report published by Bloomberg, AOL's chief executive Tim Armstrong recently met Yahoo's advisers to find out if they were interested in merging the companies.

The report claims that AOL's chief had talked with private equity firms and investment bankers from Allen & Co. working with Yahoo as he believes that the would-be merger of the two companies would strengthen their businesses.

The report emerged after Internet search engine Yahoo fired its chief executive Carol Bartz as she failed to grow the company’s huge but dwindling business.

Earlier this week, Yahoo also announced that it was conducting an all-inclusive strategic review after the decision to fire Bartz.

It may be noted here that previously Bartz had rebuffed Armstrong when he approached Yahoo with a merger plan.

Shares in AOL slipped five per cent on Wall Street on Friday amid reports that the company had approached Yahoo about a potential merger.

AOL has a market value of around $1.6 billion, while Yahoo’s market value has been estimated at approximately $18.2 billion.