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By Sarah Lacy

This is going to come as a shock to you: But suddenly and for the first time in years, I really care about the future of AOL (NYSE:AOL). And, because I used to host a show on Yahoo Finance, the story floating around about whether or not these two has-beens of the Internet (sorry, new overlords) would be better together has special resonance with me.

I don’t totally agree with Henry Blodget when he says that it’s a no-brainer because they are the exact same company. (Btw, I used to co-host that same Yahoo (NASDAQ:YHOO) show with Blodget. How can a business that employs thousands and thousands of people be so small?) Nor do I agree with Mike that working for Yahoo is a fate worse than losing hundreds of millions in acquisition value.

Here are my totally selfish, biased reasons why I hope the deal does happen or doesn’t happen. Beyond obvious navel gazing, I’m looking at this from the point of view of someone who has worked her whole adult life in media. The companies I grew up writing for are dying in increasing numbers, while TechCrunch just set an uncomfortable cap on how much even the most successful blogs can sell for. Our only hope is that either Yahoo or AOL can finally make good on this obvious but for some reason elusive promise to create a company that can afford to pay well for good content a online mass audience will read.

First, three reasons I hope it does happen:

1. I really miss the Yahoo studios team, and our up-and-down efforts to launch video programming at TechCrunch has proven to me just how hard it is– especially trying to do it on a budget. At Yahoo, I had the benefit of working in a million-dollar, beautiful studio built out during the free spending crazy dot com bubble days, and we had a staff that knew how to make us look good. At TechCrunch we have Jon Orlin running our video efforts– the very guy who actually built that Yahoo studio back in the day. So it’s not a staff problem, it’s a resources problem. Piggy-backing onto what Yahoo had already built and the insanely great Yahoo Finance platform we quickly and cheaply became a profitable division with four times the reach of CNBC. That’s something that TechCrunch just couldn’t replicate. Could AOL? I don’t know. But I do know if we could take the talent and personalities of TechCrunch and add in the expertise and facilities of Yahoo Studios we could launch the kind of amazing and slick video programming that most of us wanted from TechCrunchTV.

2. I think a big part of Silicon Valley’s future is becoming a financial and expertise hub for high-growth, tech entrepreneurs around the world, similar to the way New York became a financial hub for publicly traded companies and a management hub for media. There are huge content, advertising and conference opportunities to knit Silicon Valley elites together with the most mature and fast growing Asian entrepreneur economies. Yahoo has done a better job in Asia than anyone in Silicon Valley. It has valuable properties in China and Japan– so valuable they’re largely propping up the stock prices these days. Yahoo has also been one of the only Internet giants looking at acquisitions and building a presence in Indonesia, and it has been making a huge branding push into India in the last year. I don’t know how all of that could add up to a smart media strategy, but at least there are smart assets and teams on the ground in the most mature and most nascent Asian markets.

3. I still carry a Yahoo backpack because it’s a great backpack, and I haven’t had the heart to rip the logo off, although the OneTrueFan founders tried to convince me to at Disrupt. So, yunno, I have the backpack already… And, for some reason, Yahoo TechTicker still lists me as a reporter. (This was my best attempt at a third reason, which should say something.)

Now, three reasons I hope the deal never happens:

1. Big companies suck. The bigger they get, the more they suck. Yahoo isn’t a company; it’s a collection of smaller companies and silos. For all my talk of potential video and Asian synergies above, I’d be skeptical that any of that would ever prove to be much of an advantage for a property like TechCrunch because my sense is none of those groups are great at working together. Those are things that companies say when they buy you, but they usually don’t wind up being true. This isn’t a knock on Yahoo, it’s just a fact of life.

2. All content companies aren’t the same and all content isn’t the same. My understanding is that Yahoo is still mostly an aggregator of other people’s content, while AOL is mostly a creator of original content. Those are two wildly different businesses and I’m not sure there is a lot of synergy. When you aggregate, you pick great partners and have a symbiotic relationship. When you create content, you are competing with those partners to produce better content. Yahoo’s value in the media world is largely routing eyeballs around the Web. That’s closer to a Digg-model than AOL properties like TechCrunch, Engadget or TMZ. And managing great content creators is a lot harder than managing dealmakers. We’re nuts. Seriously. We’re highly volatile, dramatic and expensive. Why do you think the volume was never turned on during our CrunchCam days?

3. Competition is good for everyone. Some of the arguments for the deal are that AOL and Yahoo would each take out their biggest portal competition. They’d be a must-buy for every large ad deal and the prices of acquisitions like TechCrunch would be squeezed, because there’d be no bidding wars. Yeah, that’s not good for reporters and ultimately not for shareholders either. Competition makes every company better and every industry dynamic. It’s the white space between clumsy giants focused on one another that creates opportunities for new entrants. The only hope for a real media organization that can pay for and distribute the kind of great content that most blogs can’t afford and most newspapers are hemorrhaging is for Yahoo and AOL to be fighting each other to do better, not one big messy company fighting within itself.

Source: Should AOL and Yahoo Merge? Pros and Cons of 'One Portal to Rule Them All'