• by Laurie Sullivan  @lauriesullivan, January 8, 2015

Starboard Value, which recently acquired a significant stake in Yahoo, sent another letter Thursday to CEO Marissa Mayer advising that she reconsider a merger with AOL, though she reportedly isn't interested in the entire company.

In the investor's letter, delivered to Mayer and Yahoo's Board of Directors, Starboard argues that a merger would yield cost synergies of between $1 billion and $1.5 billion annually. It would help Yahoo carry out "a tax-efficient separation" of its Alibaba/Yahoo Japan stakes, and create strong growth, given AOL's progress in mobile and video advertising.

In or oust: the letter appears to threaten Mayer into following the wishes of a major stockholders, one just outside the top 10, as of November 2014. "Should you instead choose to proceed down a different path by pursuing large acquisitions and/or a cash-rich split, both of which have been speculated, such actions would be a clear indication to us that significant leadership change is required at Yahoo,” wrote Jeffrey Smith, managing member at Starboard Value.

Mayer faces pressure to turn around the company's core ad business following Alibaba's IPO in September. Yahoo owns about 400 million shares of Alibaba, yet investors are concerned that the company's ad business remains challenging.

Verizon CEO rejected the rumor of an AOL bid, but perhaps it made investors at Starboard a bit jumpy. On Wednesday, reports surfaced from Bloomberg that Verizon had engaged AOL in acquisition talks. Or considered an acquisition of cable assets, including Scripps Networks Interactive and Time Warner's CNN.  

"We hope our concerns are unfounded and would like to continue our constructive dialogue," Smith wrote. "We eagerly await the conclusion of your review and the announcement of your intentions."