NEW YORK ( TheStreet) -- Yahoo! ( YHOO) is on the block, and private equity chop shop Silver Lake is reportedly interested in buying the old Net giant and selling it off in parts.

Bankers at Allen and Co. met with Yahoo!'s board Thursday and heard a takeover proposal from Silver Lake that would involve the sale of Yahoo's Asian businesses -- Alibaba and Yahoo! Japan -- along with an attempt to sell Yahoo!'s U.S. unit, according to Bloomberg.

While the joyless, fall-to-pieces saga seems to be the most likely outcome in the wake of CEO Carol Bartz's dismissal last week, the end result could help salvage some of Yahoo!'s strengths.

For Yahoo! shareholders, there could be a reasonable payout if Yahoo! were bought out and taken private. And ultimately, as some investors predict, the move could open up a bigger chapter if Yahoo! were to be eventually combined with AOL ( AOL).

According to one investor, a Yahoo! AOL combination makes too much sense to dismiss.

Not only would it combine two sales teams, but together the companies would have a much larger Internet property to sell advertising and services.

Take messaging, for example. AOL and Yahoo! email combined would dwarf all other Web mail rivals including Google's ( GOOG) Gmail and Microsoft's ( MSFT) Hotmail. The hookup would also pair instant messaging giants AOL IM and Yahoo! Messenger into a formidable team.

And in news, Yahoo!'s strong finance and sports sites would combine with AOL's extensive news sites, which include online media outlet The Huffington Post.

Yahoo! has failed at mobile. It outsourced its No. 2 search operations to Microsoft's Bing, and it has been largely left out of the game in user-generated content like Twitter or social networking webs woven by Facebook.

If Yahoo! has a shot at redemption, it will most likely involve a deal with AOL.

Yahoo! shares are up 5% this week -- adding 2% early Friday -- on speculation that some sort of deal is in the works.

--Written by Scott Moritz in New York.

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