There’s news swirling that AOL may be interested in cutting a deal with Yahoo–perhaps even an acquisition.  As a result, Yahoo’s shares closed yesterday at $16.72, marking a $1.47 (or 9.6%) increase at a trade in NASDAQ. This is company’s highest stock mark since early May, and has surged beyond $17 in the pre-market trade.

The increase was triggered by these rumors surrounding Yahoo’s acquisition, saying several equity firms are approaching media companies  like AOL and News Corp.  Sources say that Yahoo has not yet approached by any private equity firms.

Merrill Lynch, an Analyst in Bank of America,  said in a Justin Post that the move  “makes sense” with the current valuation but with a media partner, it “could be difficult given that most big media players have not had good experiences with Internet assets.” The stock is likely to settle at around $18 a share, he added, according to a Reuters report.

NewsCorp’s share stood still at $14.18 while AOL ended up at $25.77 with a 2.6% increase.  Both of these companies have a decided take on media, with online aims to restructure marketing and revenue genration.  AOL in particular has taken to media wholeheartedly, following similar steps as Yahoo in their efforts to regain market share in the past few years.

John Furrier weighs in, saying “…this is clear that the news is being floated out there to get a feel for the price of the deal.  Actually AOL under the new leadership might be able to run Yahoo better than Carol Bartz.  This might be a great way for Bartz to get a soft landing as she has been having trouble turning Yahoo around (according to some industry insiders).  To me Yahoo should remain standalone and give the reboot efforts from Bartz a chance.  I give this deal a 30% chance of success.  I don’t see it happening.  Then again consolidation is very hot right now so that is the wildcard.”