Wall Street Journal is reporting that AOL and several private-equity firms are exploring making an offer to buy Yahoo!, citing "people familiar with the matter" describe this as one possible scenario: "Silver Lake Partners and Blackstone Group LP are among the firms have expressed interest in teaming up with AOL to buy Yahoo or trying to take it private on their own. They added that at least two or three other firms could be interested in participating if a formal buyout proposal is drawn up.
These people cautioned that these discussions -- involving private-equity firms, AOL executives and financial advisers -- are preliminary and don't yet involve Yahoo. The conversations mayn't lead to an approach given complexities in structuring a proposal."
The WSJ says other scenarios are also a possibility, including AOL and Yahoo merging after Yahoo sells off its some of its assets.
AllThingsD's Kara Swisher adds to the speculation and suggests several possible replacements for current Yahoo CEO Carol Bartz.