Wednesday, April 9, 2008

Update: Yahoo tests Google ads amid AOL talks, while Microsoft and FOX team-up to buy Yahoo

Go to AP original
SAN FRANCISCO - Yahoo Inc. is surrendering some of its advertising space to Internet search leader Google Inc. in an unusual test announced Wednesday that could be just the first step in a last-ditch effort to escape its unsolicited suitor, Microsoft Corp.

Yahoo also is close to unveiling a complex plan that would combine its Web site with Time Warner Inc.'s fallen Internet star, AOL. Under that plan, Yahoo also would spend billions of dollars to buy back stock to put some money in shareholders' pockets, according to a Wall Street Journal story Wednesday night that cited unnamed people familiar with the matter.

But Microsoft reportedly is mounting a counterattack if Yahoo's maneuvering forces it to raise its bid. In a surprise twist, Microsoft has contacted Rupert Murdoch's News Corp. about joining forces to buy Yahoo, according to a New York Times report, also posted online late Wednesday, that cited people involved in the discussions.

Yahoo has been working for more than two months to put together a package that trumps Microsoft's takeover bid.

It has explored aligning with News Corp.'s online hangout,, for example.

All the negotiations are at a sensitive stage and still could unravel, according to the newspapers' reports.


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