Following a stock slide, AOL has hired investment bank Allen & Co. and law firm Wachtell, Lipton, Rosen & Katz as advisers, reports Adweek. Both firms are prominent in mergers and acquisitions, and their hiring could signal a "high-level transaction" is under consideration, the story says.

However, AOL CEO Tim Armstrong said via email: "There is no deal on the table, no proposed deal, and both parties are on retainer with us and we work with them. Our strategy hasn’t changed and we are moving faster than ever on it."

The company declined to say whether talks are taking place about a merger or acquisition, the story notes. AOL could be a prime target for private equity firms eager to jump into the digital space.

AOL’s price has fallen by 40% since buying The Huffington Post, indicating a lack of confidence in the company’s ability to become a top Internet advertising source, the story says.