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Microsoft Talks Partnership With AOL

After Microsoft, Corp ended its efforts to buy Yahoo, Inc, the company is now talking about alternative deals with Time Warner Inc, which owns AOL, and News Corp, parent of MySpace.

However, Yahoo and Time Warner are holding their own separate talks over a potential merger of AOL with Yahoo to create a more formidable advertising and media player, but they are no closer to a deal.

Yahoo shares jumped 9 percent on Wednesday after reports that Microsoft had approached media companies to join together on a deal that would effectively lead to Yahoo’s breakup.

Microsoft also met with Yahoo investor Carl Icahn last week to encourage him to press his proxy battle for control of Yahoo’s board, the first sign Microsoft welcomed his month-old campaign.

Icahn is fighting for a new Yahoo board and wants the current CEO to exit the company in August.