Breaking News: Yahoo Choosing AOL for Micorsoft

This is the latest from the Microsoft-Yahoo saga.

The WallStreet Journal is reporting that Yahoo! is close to signing a deal with AOL to combine their internet operations. This is aimed at blocking Microsoft Corp.'s dream to acquire Yahoo, says the Journal.

According to WSJ, "Under the terms being discussed between Yahoo and Time Warner, the latter would fold its AOL unit into Yahoo and make a cash investment in return for about 20% of the combined entity, people familiar with the situation said."

The deal, which wouldn't include AOL's dial-up access business, would value AOL at about $10 billion.

On Wednesday Yahoo! also announced its decision to outsource search ads to Google. Yahoo! plans to run a two weeks trial of Google AdSense, which will deliver relevant Google ads alongside Yahoo!'s own search results.

Both these developments are not-that-good news for Microsoft.

Probably Yahoo! will remain a distant dream for Microsoft. Or is this a clever ploy by Yahoo! to put pressure on Micorsoft to increase its bid?

What do you think?

See Also:
Yahoo Responds: Deal Still Undervalues, Pay More and Deal Done
Microsoft-Yahoo Saga: The Latest
Microsoft and Yahoo! Second Merger Meeting a Failure
Microsoft Not to Raise Yahoo Bid Offer
Schmidt: Yahoo Microsoft Deal Could hurt Internet

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