• by Laurie Sullivan  @lauriesullivan, September 26, 2014

AOL worked so hard to rebuild its reputation under CEO Tim Armstrong that it now has Starboard Value urging Yahoo to explore a merger with the company that coined the famous phrase "You've got mail." The hedge fund announced Friday that it has acquired a significant stake in Yahoo, but did not identify the amount.

Yahoo acknowledged receipt of a letter from Starboard Value, publishing a comment from CEO Marissa Mayer. "We are committed, as an organization, to acting in the best interests of the company and all of its shareholders," Mayer said in a prepared statement. "We have maintained, and will continue to maintain, an open dialogue with all of our shareholders. As part of our regular evaluation of Yahoo's strategic initiatives to drive sustainable shareholder value, we will review Starboard's letter carefully and look forward to discussing it with them."

Armstrong remade AOL through acquisitions and by building up the company's advertising business. This year, he acquired Convertro for $98.5 million and Gravity for $82.4 million -- both ad technology companies -- but the largest transaction came last year when acquiring Adap.tv for $418 million.

After the Adapt.tv acquisition, AOL began focusing on programmatic media-buying to attract brands and agencies and differentiate its business from others. The company unveiled plans earlier this year for a global programmatic advertising platform called ONE by AOL to leverage technologies behind Adap.tv.

AOL will see its U.S. display ad business grow nearly 20% in 2014, per eMarketer. The data firm suggests that the Adap.tv ad platform contributed to the increase. Yahoo's U.S. display business is in decline -- expected to drop 3.6% this year, per the data firm, which projects Yahoo's display ad revenue growth will turn positive in 2015.

Yahoo also announced plans today that it will shutter three products: Yahoo Education, Qwiki, and Directory. Yahoo Education will shut down on Sept. 30, Qwiki on Nov. 1, and Directory on Dec. 31.