Should AOL merge with Yahoo? While AOL CEO Tim Armstrong declined to comment directly on the issue, he said AOL has a long, tortured history with one ill-concieved merger: the one between AOL and Time Warner in 2000.

“We had the worst merger in history,” Armstrong said, referring to the company’s ill-fated purchase of Time Warner in a speech at the Interactive Advertising Bureau's MIXX conference. “We turned it around, but now we’re staring at the next mountain in front of us.”

Armstrong said the “next mountain” was an impending disruption of Internet businesses caused by the shifting tastes of consumer video consumption, from TVs to portable devices. One would presume it's not, then, a merger with Yahoo, which activist investor Starboard Value CEO Jeffrey C. Smith started campaigning for in a public letter to Yahoo CEO Marissa Mayer last week.

Armstrong had his own tangle with Starboard, which bought up shares in AOL three years ago and launched a four-month battle over management of the company. Now Starboard thinks AOL would be a better partner for Yahoo, which is sitting on its own mountain of cash gained from Alibaba’s IPO.

Armstrong declined to comment on Starboard's letter to Yahoo, or its recommendations. But Starboard learned a great deal about the online ad business during its time as an AOL shareholder, and saw gains that it now hopes to recreate with Yahoo. Starboard's letter to Yahoo's board now has reignited interest in a merger between the two companies, which has happened a number of times since AOL was spun out from Time Warner Inc. in 2009.

During the time it spent trying to restructure AOL’s board, Starboard saw Armstrong successfully turn the company around and gain traction in fast-growing areas of advertising like video and programmatic marketing, the same areas where Yahoo is struggling, a source close to the company said.

“The Internet business is about to get disrupted again... and I hope our company is one of the ones that’s doing this disruption,” Armstrong said Tuesday.

Some members of the marketing industry are less hopeful that AOL, even when combined with Yahoo, would be able to cause significant disruption in an age when two key players dominate the industry. The key rationale for that is that the combined scale of the two portals would make Yahoo/AOL more competitive with fast-growing ad giants like Google and Facebook. 

But that might not be the case. “What excites advertisers and the money that flows from them, are new, compelling products that build brands and turn prospects, consumers, into buyers," said Michael Hayes, chief revenue and marketing officer for UberMedia.

A combined AOL-Yahoo might not be able to innovate as well as each company on its own, and neither is currently capable of crunching the data to connect clients with customers the way Facebook and Google can, he said. But some marketers contend that Yahoo’s search capabilities and customer data, when combined with AOL’s, would allow both to flourish at a time when data is the new hot commodity.

“Yahoo still has a real stronghold in search. They’ve done a really good job of figuring out how to use a lot of the resources and the cash that they had to diversify,” said Ryan M. Pamplin, vice president of digital marketing at Extreme Reach. “AOL still has a lot of eyeballs, so coming together... makes a lot of sense, given that Yahoo has all this great content. And together, they could probably have a much stronger hold on the market together than they would separately.”