New York - Troubled US web portal firm Yahoo! is in negotiations to buy Time Warner Inc.'s AOL business, the financial news agency Bloomberg reported on Thursday. Yahoo!, which earlier in the week rejected a 47.5-billion-dollar takeover bid by Microsoft in a move that saw the resignation of CEO Jerry Yang, is according to Bloomberg bidding for AOL's web advertising business in return for a stake in a new combined company.
Executives from Yahoo! and Time Warner have met in the past few weeks to negotiate terms for the prospective deal, Bloomberg said, citing unnamed sources.
Time Warner has long sought either a dramatic new strategy for AOL or a buyer, in the light of competitor Google's dominance of the internet search advertising market.
The deal would potentially bolster Yahoo's position in the display-advertising market, although any deal would invariably lead to a cut in staff at both firms, Bloomberg said.
Yahoo shares declined 21 per cent on Wednesday on Microsoft chief Steve Ballmer's announcement that takeover talks between his firm and Yahoo were "done," although he hinted that cooperation between the two firms could take place in the future.
Yang's resignation Monday at Yahoo! came after months of falling revenue, fierce proxy battles and a series of botched negotiations that scuttled what now seems to have been an exceedingly generous buyout offer from Microsoft.
