SUNNYVALE, Calif. — Yahoo and AOL are closing in on a deal to combine their Internet operations, according to The Wall Street Journal. The move could thwart Microsoft’s effort to acquire Yahoo, people familiar with the matter said.
The possible Yahoo-AOL tie-up is part of a threefold plan by Yahoo to present shareholders with an alternative to Microsoft’s unsolicited offer. Yahoo would also propose repurchasing billions of dollars of its shares.
Additionally, Yahoo is surrendering some of its advertising space to Internet search leader Google in a test that appears designed to frustrate Microsoft. The experiment announced Wednesday will allow Google to place ads tied to about 3 percent of the queries made in the United States through Yahoo’s search engine — the Internet’s second-largest, after Google’s. The Associated Press
