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Yahoo, Microsoft chasing AOL -- again

July 14, 2008 |  1:53 pm

AOL could soon stand for All About the Love.

Bewkes

Yahoo's conversations with News Corp. have congealed on the back burner. But the on-again, off-again, on-again, off-again turnstile of talk of bringing together AOL and Yahoo, two online advertising juggernauts, has heated up again, people familiar with the situation said.

Says one very highly placed Yahoo source: "The AOL negotiations are on the front burner."

"They have very valuable assets in the whole display arena," said the source, who requested anonymity because the talks are confidential. "Together with Yahoo, they would make a very powerful entity in the marketplace in display advertising. That strategically makes a whole lot of sense."

In fact, our source says Yahoo Chief Executive Jerry Yang and Chairman Roy Bostock have been having "good discussions" with Time Warner CEO Jeff Bewkes (pictured).

"Jerry and the management are cautiously optimistic that there may be something there of real value to Yahoo shareholders," the source said.

The deal would be the same as previously discussed: Time Warner would take about an 18% stake in Yahoo in return for the AOL assets, including its Platform A advertising unit, and other content assets such as the newly acquired social networking site Bebo. That figure is still being negotiated, but "both parties are close enough to figure out how to close that gap," said the source.

Plus, Yahoo likes negotiating with AOL much more than with Microsoft and believes the deal is a much better cultural fit, our source says.

That can't be good news for Microsoft, which is said to have the same romantic interest.

After all, if they can't have each other, each one seems to want AOL.

Of course, Yahoo wouldn't deal for AOL before its Aug. 1 annual meeting because such a move would probably cause its stock to plunge and thrust the company into the waiting arms of billionaire investor Carl Icahn.

Isn't love grand?

-- Jessica Guynn

Photo: Jeff Bewkes, chief executive of Time Warner. Credit: Evan Agostini / Associated Press

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