Yahoo president and CEO Marissa Mayer speaks during a keynote...

Yahoo president and CEO Marissa Mayer speaks during a keynote address at the International Consumer Electronics Show in Las Vegas. (Jan. 7, 2014) Credit: AP

Shares of both Yahoo Inc. and AOL Inc. jumped in afternoon trading on Friday, turning sharply higher after Starboard Value LP urged a strategic combination of the companies.

Starboard said it had acquired a significant ownership stake in Yahoo and, in an open letter to Yahoo's board and chief executive, said that a combination with AOL would "unlock tremendous value," speculating that it could generate up to $1 billion in synergies.

Yahoo had been trading modestly higher on the day but turned sharply higher shortly after noon. It rose as much as 4.6 percent before paring its gains modestly, last trading up 3.3 percent at $40.24, where it remained one of the S&P 500's biggest percentage gainers. Volume of 30.1 million shares was on track to surpass its 50-day average of 33.2 million.

AOL rose 3.8 percent to $44.62.

East Hampton battery storage … June inflation on LI … FeedMe: Ice cream and gelato Credit: Newsday

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