The New York Post reports plans from Time Warner and Microsoft to merge AOL and MSN into a 50/50 joint venture.
This would combine many strengths. Reach and page views will be enormous. Google and Yahoo! will face a much tougher competitor (and possibly News Corp, if it goes on buying stuff).
To name a few strengths: AOL in subscribers (if declining), content, IM and some search (Singingfish); MSN in IM and search.
No doubt there will be lots of questions too. Mail and IM systems are different; AOL works with Google and MSN with Yahoo! for sponsored search (will both cooperations end?).