SAN FRANCISCO (Reuters) - Yahoo Inc and Time Warner Inc are “closing in” on a deal where Yahoo would merge with Time Warner’s AOL Internet unit, brushing aside Microsoft’s bid for Yahoo, a source familiar with the talks said on Wednesday.
The source confirmed a Wall Street Journal story saying Yahoo would receive a cash investment from Time Warner in exchange for a 20 percent stake in the combined Yahoo-AOL business. The deal would exclude AOL’s fading dial-up Internet access business and value AOL at about $10 billion.
A deal with Time Warner and AOL would be part of a multi-pronged strategy by Yahoo in which it would outsource Web search advertising operations to Google Inc, the source said.
Separately, The New York Times reported that Microsoft and Rupert Murdoch’s News Corp are in negotiations on making a joint bid for Yahoo. That merger would join Yahoo, Microsoft Corp’s MSN and News Corp’s MySpace, the paper said.
Reporting by Eric Auchard; Editing by Braden Reddall