Activist Investor Pushes Yahoo's Marissa Mayer to Buy Rival AOL

Yahoo CEO Marissa Mayer is getting some unsolicited advice on how to turn around the long-struggling Internet company.
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Yahoo CEO Marissa Mayer is getting some unsolicited advice on how to turn around the long-struggling Internet company. In a letter on Friday, activist investor Jeffrey Smith urged Yahoo to buy another fallen Internet star, AOL and take steps to reduce the future taxes on the company's lucrative stake in China's Alibaba Group. He also chastised Mayer for spending $1.3 billion during the past two years for acquisitions that have little to show in return so far. To bolster his arguments, Smith says he has built a "significant" stake in Yahoo through Starboard Value. The size of the stake hasn't yet been divulged. The idea of Yahoo and AOL is getting together isn't a new one. Various analysts and other Internet observers have argued a marriage between the two companies would allow them to cut costs, attract more Web surfers and, most importantly, strengthen their online advertising arsenal to improve their chances of competing against Internet stalwarts Google and Facebook.