Time Warner, Yahoo up on report of AOL talks

NEW YORK (Reuters) - Shares in Time Warner Inc (TWX.N: Quote, Profile, Research, Stock Buzz) rose 4.7 percent on Wednesday after Reuters reported that talks to sell its AOL Internet unit to Yahoo Inc (YHOO.O: Quote, Profile, Research, Stock Buzz) or Microsoft Corp (MSFT.O: Quote, Profile, Research, Stock Buzz) have heated up ahead of Yahoo's August 1 shareholders meeting.

Time Warner shares increased 67 cents to $14.59 on the New York Stock Exchange, while Yahoo was up 95 cents to $22.49, and Microsoft jumped 99 cents to $27.14, both on Nasdaq.

Though a structure of any potential deal is not immediately clear, sources told Reuters earlier that a deal with Yahoo would likely involve merging AOL with Yahoo, with Time Warner taking a minority stake in the combined company.

The sources told Reuters that a deal with Microsoft would likely involve a sale of AOL.

Time Warner's talks come after Microsoft's buyout talks with Yahoo fell apart, with Microsoft withdrawing its $47.5 billion bid in May.

(Reporting by Yinka Adegoke; editing by Jeffrey Benkoe)